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  • RadioShack Gets Ready To Ship Out 0 comments
    Mar 5, 2014 10:11 AM | about stocks: RSH

    Did you catch Alf the Alien and Erik Estrada of Chips in between Super Bowl plays this year? Well, even if you did have a chance to see RadioShack's (NYSE:RSH) commercial poking fun at the store's outdated perception, it might be too late to save the electronics depot. For the eighth consecutive quarter, RadioShack has posted a quarterly loss, the last report revealing a net loss of $191.4 million for the fourth quarter of 2013. The company is struggling to survive due to competitors like Amazon.com, leaving the store with minimal foot traffic, overstocked unwanted items, as well as lack of inventory of key items. Some top analysts are ready to get rid of RadioShack's stocks recommending SELL RSH, while other analysts are recommending HOLD RSH as the company makes strategic business moves.

    B. Riley analyst Scott Tilgham recommended SELL RSH after the company announced that it will shut down as many as 1,100 underperforming stores. Scott argued, "the company is burning through cash. We don't see the fundamentals moving out of the red at least [not in] the foreseeable future." Even though RadioShack is staying active to slow its demise, Scott does not believe the "CEO Joe Magnacca has succeeded in rejuvenating the almost-century-old chain." Scott has a 4.1% average return over S&P-500 and a 71% success rate of recommendations.

    On the other hand, Stifel Nicolaus analyst David Schick recommended HOLD RSH, giving the company time to see their strategic plans bring results. David noted, "strategic initiatives will take time and expense. Closing stores is a positive and the chain may be able to regain some sales online." David does recognize that "their biggest category is wireless," and "the majority of folks have their mobile phones," so the company is "past adoption" on this market. But, he believes in the CEO's abilities to execute promising plans and advises investors to hold out for both these ideas to take shape and for the stock to see some positive outcomes. David has a +0.4% average return over S&P500 and a 43% success rate of recommended stocks.

    The closing of thousands of RadioShacks has some analysts worried about the downward trend of the stock and recommend that investors SELL their involvement with RSH, while other analysts see this as a step in the right direction.

    Stocks: RSH
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