Electronics retailer RadioShack Corporation (NYSE: RSH) is on the rebound. The company posted net income of $46.3 million for 3rd Quarter 2007, as opposed to a net loss of $16.3 million in 3Q 2006. Cash generation is up, prepaid wireless system sales are up, GPS system sales are up, gross profit is up, and cash balances are up. On the flip side, better inventory management and a more profitable product mix combined with serious cost control efforts to reduce SG&A expenses by 13%, contributed to the rebound.

Radio Shack managed to post these good numbers despite the fact that total sales fell 9.4% due to large declines in Sprint post-paid wireless systems. CEO Julian Day insists that Radio Shack will continue to focus on both growth and profitability despite continuing problems in post-paid wireless sales. The company is trying to help its bottom line by continuing to repurchase shares, $162 million worth in 3Q 2007 alone, out of $209 million YTD.

Perhaps electronics will be a hot holiday seller this winter, giving Radio Shack a much needed boost. The stock currently trades at $18.21 and will pay a dividend of 25 cents per share.

In an SEC filing Goldman Sachs (NYSE: GS) Asset Management said it had upped its ownership of Radio Shack (NYSE: RSH) to 12.6% of the company's outstanding shares. In a separate filing Fidelity Asset Management has reduced its holdings in Radio Shack to 7.6% down from 15%. Goldman's actual share count in Radio Shack is around 17 million shares, of which the bulk was purchased following Radio Shack's March 31st quarterly release.

Radio Shack currently sports a $4.5 billion market capitalization and the stock has been one of the best performers this past 12 months. The company's 52-week low was $13.73, the high at $34.91. The stock is trading at $33.58.

CEO Julian Day joined Radio Shack last July with the strict mission to turn around this once ailing retailer. Mr. Day has undertaken several cost-cutting measures including trimming back the chain's 4467 store base. Closing unprofitable stores and consolidating stores where geographically sensible has contributed to this turn around.

One wonders if Mr. Day's mission is to turn around the company and sell it. Radio Shack is rumored to be looking for a possible suitor, possibly Dell (NASDAQ: DELL) . Dell is exploring new distribution methods and a store base of over 4,000 could be a step in the right direction. Goldman's recently increased share position after the stock has moved up so much is a strong vote of confidence for Mr. Day...

Georges Yared is the CIO of Yared Investment Research.

RadioShack Corp.'s (NYSE: RSH) past problems are still lingering for the oddball retailer, but give it some credit (I think). The retailer's latest quarter showed profit growth amid changes like closing stores and selling more popular electronics items. With new leader Julian Day at the helm, under-performing stores are seeing the axe while a focus on personal electronics and wireless sales are helping the company stay afloat.

I have to admit, many recent visits to the retailer have resulted in rabid-dog sales associates pushing new cellphones and contracts faster than I can say no. I hope RadioShack is not relying solely on wireless sales to prop up sales and profits, but that is the impression I've had lately.

RadioShack Corp. (NYSE: RSH) has had some disastrous years recently; frankly, it's hard for me to believe the company stays in business in an era of Best Buy and Wal-Mart. Except for small electronic parts and miscellaneous gadgets, does anyone shop at RadioShack for anything? Judging by the small parking lots at the RadioShacks I see, the foot traffic is pretty darn small. Yet, the chain just keeps on going and going. Perhaps partnering with Cingular Wireless and Sprint Nextel is keeping margins afloat in some way.

Since the firing of RadioShack's former CEO based on resume falsification in the midst of a terrible-performing year, RadioShack recently landed Oxford-educated Julian Day (subscription required) to take the helm and fix the fortunes of the electronics retailer. Day's already started the task by cutting costs at every angle and by instituting very strict financial controls, as the results for RadioShack's recent fourth quarter show. Earnings were up 60% YoY (year-over-year) on $1.5 billion in revenue, and RadioShack shares are up 61% in 2007.

Can this rapid turnaround continue? With Day at the helm, it probably will. Most likely, more underperforming stores will be closed and advertising spending will be cut and spent more responsibly. Alongside that will be Day's penchant for tight inventory management at all stores and distribution centers. In other words, Day is instituting standard management (competent) procedures to help get the retailer consistently in the black. So far, after eight months on the job, he's succeeding.

It's been a long time since I've been in RadioShack Corp. (NYSE:RSH) store. I'm not sure why'd I go there. And, I'm definitely not alone. There are too many alternatives, like Circuit City (NYSE:CC), Best Buy (NYSE:BBY), Target (NYSE:TGT) and Wal-Mart (NYSE:WMT).

But, even companies that have limited futures can still be good investments -- especially if the price is right.

In this week's Barron's [a subscription publication], there's an excellent take on this. Basically, RadioShack's CEO, Julian Day, is a realist. He doesn't have fantasies that the company is the next-big-thing. Instead, his strategy has been to restructure the company to make it into a sustainable business.

It's really about cutting, cutting, cutting. Why have lavish advertising campaigns? Why have tons of stores? Although, this is the easy stuff. To make the turnaround a true success, Day needs to come up with the right product mix.

Then again, with a much more solid income statement, he now has the luxury to rethink things.

So far, so good. And it also shows that even seemingly doomed companies do have a chance.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Oh, RadioShack. Didn't you learn anything from all the similar, embarrassing layoff gaffes that proceeded yours?

Guess, not. Last July, RadioShack made the unfortunate decision to fire 400 staffers by e-mail. The company got a lot of heat back then. And it continues. This week it made Business 2.0's list for dumbest moments in business.

Nonetheless, RadioShack Corp. (NYSE: RSH) may still be a good stock to own. The stock was at $18 when that decision was made. And now it's at $20.40.

Dylan Jovine, the editor of The Tycoon Report, picked it as his top speculative idea for 2007. He thinks that former Kmart executive Julian Day, who took over as chairman and CEO in July, has the stuff to turn RadioShack around.

Maybe so. Day probably had something to do with the layoffs, but not with the decision to notify employees by e-mail.

Still, to execute the turnaround, Day will need plenty of employees with high morale. And, if he doesn't have them yet, probably a few more bright lights in the human resources department.