Short City Update: Radio Shack, hold short

Posted Oct 5th 2009 3:30PM by Joseph Lazzaro
Filed under: Short Stories, RadioShack Corp (RSH), Stocks to Sell

An update on a short position: Radio Shack Corp. (NYSE: RSH), first recommended on August 4, 2009 at a price of $16.13.

Too many retail (and wholesale) electronics stores in the U.S., too many Radio Shack stores, and a likely sales decline for Radio Shack in FY2009 and FY2010 do not bode well for RSH's shares.

Over the past year, Radio Shack has done a decent job to-date closing underperforming stores and kiosks, but the electronics devices competition just looks too tough, and there are no bankable, new catalysts to reverse the downward sales view.

Add a frugal consumer era, and RSH's turnaround is in doubt. Cover Short on a bounce off $10, $6.50 or $5. Buy/Stop Loss if you sold shares in this company: $22.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

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Reader Comments (Page 1 of 1)

10-06-2009 @ 10:16PM

Mark said...

Yet RadioShack continues to be the survivor though year after year people predict there demise. The facts that are lost is 1) it is still you have questions we have answers which most of the other big box stores don't have 2) they are generally much more profitable than any of the other retailers, 3) they are the "neighborhood" electronics store. Last but not least, they don't sell panties, microwaves, large screen tv's , food, ice skates, rifles, etc. The one thing that Wall Street seems to think they are in competition with. Waiting for the day when you realize they are just as much a convenience store as is any local deli.. The difference, they serve up electronics only and actually know about what they sell on the whole.