RadioShack (RSH) is a shadow of its former glory. There is no arguing that. What was once a $70 stock is now selling at about $2.40. Today the company announced that it is closing 1,100 underperforming stores (about 25% of its stores) as it continues its turnaround plans. As of today, the company continues to lose money and there seems to be no hope left.
The question is…..is this company toast or is this the next Tenbagger?
RadioShack reminds me of RiteAid (RAD), which is up 550% over the last 1.5 years. RadioShack is selling well below its Intrinsic and Book Value. The primary question is this. Will the company be able to execute it’s turnaround plan and recover or will it be filling for bankruptcy within a few years. We won’t know either way until the stock price confirms. RadioShack chart is starting to look very good. With firm base in place and an indication of a bull move, RadioShack’s turnaround might work out. If it does, this stock is likely to be up over 1,000% over the next 5 years. It is definitely going onto my watch list.
Please do your own research.
March 4 (Reuters) – Struggling retailer RadioShack Corp reported a wider quarterly loss on Tuesday and said it will close up to 1,100 U.S. stores after a huge drop in sales over the holidays, sending the stock down more than 15 percent.
Sales at the Fort Worth, Texas-based chain have been in free fall amid executive departures, tough competition and an image problem. Despite its ubiquitous presence in the United States, analysts say it has not done enough to transform itself into a destination for mobile phone shoppers or become hip enough to woo younger shoppers.
Its net loss widened to $191.4 million, or $1.90 a share, in the fourth quarter, from $63.3 million, or 63 cents, a year earlier.
Sales fell to $935.4 million in the quarter covering the all-important holiday season, from $1.17 billion in the year-ago period. Analysts, on average, looked for sales of $1.12 billion, according to Thomson Reuters I/B/E/S.
Sales at stores open at least a year fell 19 percent on weak customer traffic.
Chief Executive Officer Joe Magnacca, who took the helm in February 2013, has said he expected the turnaround to take several quarters.
The stock fell 15.4 percent to $2.30 in premarket trade.
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