Q: What's up with my shares of Best Buy Co.? Is the problem just the economy? -- R.C., via the Internet

A:There are some issues in the situation facing this aggressive company that ranks as the nation's No. 1 consumer electronics retailer and No. 11 overall retailer.

Early last year, Chief Executive Brad Anderson promised to shift the superstore giant's focus toward better customer service. This effort, featuring specially trained sales associates, was termed "customer-centricity."

Yet, to considerable surprise, earnings in its recent fiscal first quarter fell 18 percent and Anderson also lowered his fiscal 2008 profit estimate.

A weak U.S. economy has been diverting customers from high-margin products such as flat-screen televisions, he said. Meanwhile, the narrower profit margins of the firm's China business acquired a year ago have weighed on its overall results.

Shares of Best Buy (BBY) are down 3 percent this year following gains of about 13 percent last year and 10 percent in 2005.

Despite the firm's remarkable inventory control and market-share gains, consumer electronics is a brutal industry sensitive to consumer spending. Circuit City Stores Inc. is laying off thousands of employees, Tweeter Home Entertainment Group filed for bankruptcy and CompUSA Inc. closed half of its stores.

To provide Best Buy with a boost, its board of directors authorized the repurchase of up to $5.5 billion worth of common shares, which other large retailers such as Home Depot Inc. have done. It also plans to increase its quarterly cash dividend to 13 cents from 10 cents, to be paid Oct. 30 to shareholders of record Oct. 9.

The consensus rating on Best Buy shares is a "buy," according to Thomson Financial, consisting of eight "strong buys," nine "buys," 11 "holds" and one "underperform."

Best Buy, with more than 1,000 stores in North America, has announced long-range plans to increase its target number to 1,800, up 400 from its prior goal. It will also consider acquiring more companies. It owns Geek Squad, Pacific Sales Kitchen and Bath Centers, and Canada's Future Shop stores, but its attempt to turn around its acquisition of the Musicland Stores failed and it sold it off.

It has a majority interest in Jiangsu Five Star Appliance Co., China's fourth-largest consumer electronics retailer, and opened a Best Buy store in Shanghai. It expects to open eight to 10 stores in China in the next year and a half.

Earnings for its current fiscal year ending in February are expected to increase 7 percent. Next year's forecast is for a 15 percent increase. The five-year annualized return is projected to be 15 percent versus 14 percent predicted industrywide.

Q: Is the Muhlenkamp Fund worth my investment money? -- V.M., via the Internet

A: Nobody's perfect.

Though this fund has rewarded investors over the long haul by deftly choosing value stocks of any size it pleased, results lately have been pummeled by declines in housing, mortgage-lender and energy stock holdings.

The $2.3 billion Muhlenkamp Fund (MUHLX) gained 13 percent over the past 12 months to rank in the bottom percentile of large value funds. Its three-year annualized return of 12 percent places it in the lowest 10 percent of its peers.

"The fund hasn't been so hot recently, but has been wonderful over the long term, and portfolio manager Ron Muhlenkamp is very experienced," said Greg Carlson, analyst with Morningstar Inc. in Chicago. "He started buying home-building stocks in 2000 and made a great deal of money off them, but obviously they've suffered recently."

Muhlenkamp founded Muhlenkamp & Co. in 1977 for private accounts and launched this fund in 1988. It has a concentrated portfolio of about 50 stock names, which adds individual stock risk. Muhlenkamp's long-term economic calls and willingness to make big sector bets can lead to volatility.

What investors consider a faltering portfolio holding could, in Muhlenkamp's eyes, simply be a well-positioned stock awaiting a revival. He is patient. His holdings had been in the mid-cap range, but moved up to large-cap the past couple of years. Turnover is low, making the fund tax-efficient.