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Market Update

Best Buy Bites Hundreds of Mutual Funds

But the company's prospects sill make it a good holding.

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Electronics retailer Best Buy's (BBY) nearly 40% plunge Thursday could shock close to 360 mutual funds. The dip, however, may only serve to make Best Buy a better buy, said stock analyst Mark Sellers.

On Thursday, Best Buy warned earnings for the soon-to-be-completed third quarter and upcoming fourth quarter would not meet analysts' expectations. The company said sales at stores open for at least one year were steady and it expected them to remain that way. However, it also reported price competition and slower consumer spending had eaten into its margins.

Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.