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RadioShack: reliably ubiquitous

When it comes to consumer electronics retailers, most of us can name several big outfits with no trouble at all. There is only one, however, that claims to be located "within minutes of where all Americans either live or work." The company is headquartered in Fort Worth, Texas and the odds are you have done some business with them.

RadioShack Corporation (NYSE:RSH) sells consumer electronic goods and services, through more than 6,000 North American outlets and nearly 800 non-RadioShack branded kiosk operations. Featured products include radios, computers, telephones, electronic parts, DVD players and toys. The stores also sell third-party wireless calling plans and direct satellite feed.

The company pleased investors last week, when it reported Q4 EPS of 65 cents and revenues of $1.46 billion. Analysts had been looking for 42 cents and $1.47 billion. Management also guided FY07 EPS to $1.00-$1.20, versus consensus of 90 cents. RSH shares popped on the news and have since been consolidating the gain in a bullish "pennant" pattern. Stocks frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside. The first step in the breakout may be in progress today.

Brokers recommend the shares with one "strong buy", two "buys", fourteen "holds" and six "sells". Analysts see an eighteen percent growth rate, through the next year. The RSH Price to Sales ratio (0.70), Price to Free Cash Flow ratio (14.95) and EPS Growth rate (55.28%) compare favorably with industry, sector and S&P 500 averages.

Institutions hold about 95 percent of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past twelve months, it has traded between $13.73 and $26.24. A stop-loss of $21.40 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

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Last updated: February 13, 2012: 03:15 PM

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