Best Buy (BBY) fell by 35 percent over the past two days in response to the company’s announcement on Jan. 16 that its same-store sales declined during the 2013 winter holiday shopping season, as compared to the same period a year ago, and that its income from operating activities is expected to fall by approximately 1.8 percent-1.9 percent during the quarter ending Feb.1, 2014.

After being one of the better-performing stocks during 2013, the question now becomes will Best Buy and its stock go the way of J.C. Penney (JCP), which lost 91 percent of its market value from Feb. 21, 2007 to Jan. 17 of this year, or will the company’s operating performance improve and its stock price rise sharply during the months ahead.

In an effort to answer that question, let’s review some important factors and developments that Best Buy mentioned in the press release that it issued on Jan. 16.

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According Best Buy CEO Hubert Joly, “the promotional intensity that began with Black Friday [Nov. 29, 2013] continued throughout the period,” which led the company to lower its prices in an effort to “defend” its market share.

As a result of those price cuts, Best Buy was able to increase its share of the retail consumer-electronics market during the 2013 winter shopping season, while the total revenues for all companies that operate in that industry declined by 2.4 percent during that period.

Joly went on to say that Best Buy’s winter holiday sales were impacted negatively by “significant store traffic declines between ‘Power Week’ and Christmas,” meaning that a fewer number of people shopped at Best Buy’s retail stores during the 2013 winter shopping season than during the prior year.

On a positive note, Joly said that sales generated from the company’s Internet web sites rose by 23.5 percent during the 2013 winter shopping season, as compared to the same period a year ago.

As a result of the factors and developments mentioned above, Joly said that Best Buy will strive to lower its costs over the next 12 months and to grow its online sales at an accelerated pace.

In addition, Joly said that the company will seek to reinvigorate its Geek Squad services, which provides repair and installation services for consumer electronic products, in an effort to increase its revenues from that division.

Now, let’s review some comments that Best Buy made almost a year ago in its fiscal 2013 annual report, which was filed with the U.S. Securities and Exchange Commission on March 27, 2013.

In that report, Best Buy said that it would focus on the following factors during its fiscal year ending Feb. 1, 2014: reducing the prices that the company pays wholesalers and manufacturers for the products it sells;  reducing its selling, general and administrative expenses; and accelerating increases in sales that the company generates from its Internet web sites.

And, that’s exactly what the company did over the nine months ended Nov. 2, 2013. Specifically, Best Buy reduced its cost of goods sold — the prices that it pays wholesalers and manufacturers for the products it sells — by 3.6 percent, and it reduced its selling, general and administrative expenses by 5.8 percent during that period. Meanwhile, the company increased its U.S. online sales by 15.1 percent during the nine months ended Nov. 2, 2013.

Those are very significant developments because they reveal that, unlike many companies, Best Buy did exactly what it set out to do during 2013.

As a result of the company’s cost reductions and its substantial increases in online revenues, Best Buy’s net income from continuing operations rose by 98 percent during the nine months ended Nov. 2, 2013, as compared to the same period during 2012.

I see no reason why Best Buy wouldn’t be able to continue to execute its well-defined business plan during the current year.

Therefore, my experience suggests that financial market participants made a big mistake last Thursday and Friday by selling Best Buy in a frenzy just because the company’s same-store sales during the 2013 winter holiday shopping season were lower than Wall Street “analysts” had expected.

However, in the financial markets anyone’s losses are usually someone else’s gains, meaning that the big drop in Best Buy over the past two days presents, in my opinion, a fantastic opportunity to buy shares of Best Buy at a bargain price.

While I think there’s a good chance that J.C. Penney will continue to trend lower over the next six months, I expect Best Buy to rebound sharply by the end of this year.

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David N. Frazier has an extensive background in the investment securities industry and has invested in the financial markets for more than 25 years.

In addition to working as a business analyst, merchant banking analyst and equity research analyst, he’s held positions in sales and marketing at institutional investment firms, including William O’Neil & Co., TDAmeritrade, and Merrill Lynch.

David now serves as the president and chief market strategist of Frazier & Mayer Research, LLC (dba www.TheMarketMonk.com), an independent investment research firm that provides research and analytical services to hedge funds, investment advisory firms, and other investment newsletters.