The first thing I will let you know is that I am not a veteran investor or seasoned analyst. I am relatively new to active trading and investing and I rely on Seeking Alpha articles/authors and especially the comments from members. That is how I learn. I have benefited greatly from others and have decided to give back to the team in the form of this - my first article. Six months ago I used to have 100% of my portfolio in mutual funds and then realized the returns on my mutual funds had been very mediocre. I told myself that I would start getting into stocks with more risk and hopefully more reward.
With that out of the way I will explain why I believe this is the year Radio Shack (RSH) turns the corner and so does its share price. I am not going to wow you with big fancy charts or talk about resistance levels or even what the short % is or the float. Quite simply I will give you the perspective of an investor who is a keen observer and trusts his instincts. My approach to investing is get as much information as I can and then I look at the 2-year performance chart. I ask myself - "where has this stock been?" and this tells me a story of its potential. My portfolio is very much succeeding and includes Nokia (NOK), Mitek Systems (MITK), Bank of America (BAC), Pacific Biosciences of California (PACB), BG Medicine (BGMD), Alcatel-Lucent (ALU), Mannkind Corp (MNKD), Thompson Creek Metals Company (TC), Enphase Energy (ENPH), Weatherford International (WFT), Amarantus Bioscience (AMBS) among others.
I am happy to say I rode the wave on Blackberry (BBRY) and Keryx Biopharmaceuticals (KERX) and have since closed out those shares. I could have never done this unless I was paying attention - every day. I have realized that the pipeline of information is the absolute key to successful investing. Do you ever see one of your shares increase about 5-10% in one day and you have no idea why? You look for some sort of news or updates to see what is going on - and there is nothing on the wires - except the notion that it's just "magic". My feeling is that there is a group of people who happen to have special information in one form or another and they are the first on the scene and the first to reap rewards. And so this brings me to Radio Shack.
The last couple of years have seen a share price that went from $16.02 in early 2011 to about $3.18 as I write this article. What is interesting about this story is that if you look carefully at the stock chart for the last 2 years you will see the stock price has steadily and consistently dropped. In fact, in 2012 there weren't any real upspikes. That alone is very interesting because when I look at stock charts I usually see lots of ups and downs. This one is different - no upspikes. The last few months of 2012 the price was right around $2.20 and in the last 10 days it shot up to $3.18. Wow! Almost a 50% increase with no big headlines. It makes me think what would happen if there were some headlines. And my gut tells me that when this horse has been beaten down so badly, that at some point the horse is going to get up. And after seeing this spike, I believe it has bottomed out and is headed toward the upside. There was a person who placed a comment on a previous RSH article that basically said there are a lot of people waiting on any "whiff" of good news to get back on the RSH train and look for a "double". And I completely agree. I just want to make sure I own enough RSH before the good news hits.
Now for those of you not tracking this stock - right now is a great time to look at this speculative buy. As a relatively new investor I can tell you that once you read an article like this you already missed what I call the "early gravy". And since the stock has increased almost 50% with very little news I can say that some of the early gravy is already off the table. But my feeling is that this rebound is just getting started. I have been following this stock every day for about 4 months. And I have the same feeling that I had when I got in on Nokia (Nokia is a nice comeback story in the making) - this is not a company that is headed toward bankruptcy but rather toward normalcy. And normal is great when the price is cheap. So with this article I only have one goal - and that is to make the non-institutional investor "aware" that this is a potentially great stock for some serious appreciation.
Do your homework and decide for yourself. As I mentioned before - information and the timeliness of when you get the information makes all the difference between a decent return and a fantastic return. So now I have let you know that RSH is worth your attention and as an investor looking for value - awareness is half the battle. I am ready for the comments (I can predict the captain will be leaving several). At some point you have to recognize when an investment has more upside than downside. I am long RSH and may increase my position in the next 72 hours.