Sometimes, buying the dip on a stock can turn into trying to catch a falling knife, and the consequences may be more expensive than a hospital visit and a few stitches. However, there are times when being a contrarian and buying the dip on the right stock can do wonders for your wealth-creation journey.

Today, the consumer discretionary sector has offered investors tons of bullish momentum, as the Consumer Discretionary Select Sector SPDR Fund (NYSEARCA: XLY) has beaten the broader S&P 500 by as much as 11.3% on a year-to-date basis. However, one name has yet to receive its fair share.

Best Buy Co. Inc. (NYSE: BBY) has been disregarded by the market as it is perceived to be losing market share to retail giants like Amazon.com Inc. (NASDAQ: AMZN). Management is aware of this, and so are analysts, which is why today's perception is as important as it has ever been.

Right levels

When looking at Best Buy's stock chart, you can immediately notice how the recent downturns have thrown it into the "golden ratio" of Fibonacci levels. Being within the 68% to 72% retracement and surpassing this level could imply that the stock is approaching an interesting demand zone.

As most savvy investors know, technical analysis is only the beginning for the long hours ahead for picking the right stock. We've done the homework, so learn why Best Buy may be your best pick this quarter.

Beginning with price action, you know the sector is in a full bull market. However, Best Buy stock is showing symptoms of a bear market. As defined by Wall Street as a 20% or larger discount from recent highs, it fits the description.

Best Buy stock is trading at 73% of its 52-week high prices, whereas competitors like Deckers Outdoor Corp. (NYSE: DECK) and DICK's Sporting Goods Inc. (NYSE: DKS) trade at much more favored rates of 99% and 81%, respectively. However, this is only the beginning.

Despite a disappointing sales figure in their latest quarterly financial results, Best Buy management pointed to increasing profitability and more streamlined operations. That's what you should be hoping to hear from this company.

Because Best Buy is still ramping up its online sales segment, keeping costs under control while reinventing its business model is critical, so increasing operating margins should be music to your ears. Moreover, sales have also declined for competitors, so don't worry.

They don't want you to know

Beating down the stock is a classic big-money strategy: scare away the retail investors so that they can pick up cheap shares and then pump out the good media surrounding the business. In the case of Best Buy, the market knows something you don't.

While the retail consumer electronics industry should grow its EPS by an average of 8% in the next 12 months, analysts projected a 9.8% jump for Best Buy's earnings. However, the stock is still trading at a 10.9x P/E, which implies an attractive 40.1% discount to the industry's average 18.2x multiple.

Because earnings will grow past the industry average, and the quality of these earnings is increasing due to management efforts to restructure costs, markets should be willing to pay a higher premium for the stock, right?

Because most of the market, as you now know, has been scared off with bearish price action, only insiders are willing to commit capital to this cheap valuation. And when insiders put their money where their mouth is, you bet something big is cooking.

Management has repurchased $270 million worth of stock in 2023, representing nearly 2% of the company's market capitalization, not a statistic you'd want to pay attention to.

As it turns out, Invesco (NYSE: IVZ), which happens to be Best Buy's largest shareholder, has upped its position by as much as 8.7% in November of 2023. Considering the current stock levels, it seems to be an extremely well-timed purchase.

These insider purchases have given analysts enough confidence to place a $77.9 share price target on Best Buy, calling for a 15.2% rally from today's prices to meet it. The outlook for management strategy is holding up on the positive end of things.