| Left for dead by most investors early in the year, RadioShack (RSH) has stagged an impressive 200% rebound since bottoming in March. At 11.9 times consensus earnings estimates for 2010, RadioShack trades at a below-market multiple. Unfortunately, that could still be full value for a company that is not growing its store base and will continue to face competition from larger rivals, says Barron's. Wireless-related sales have helped to quiet RadioShack's critics this year, with sales in its wireless category grew 40% in Q3. Still, overall same-store sales remained negative for the quarter, weighed down by items like laptops, navigation devices, batteries and digital television converter boxes. The macroenvironment could make that difficult for RadioShack to try and grow its same-store sales to boost earnings, particularly for a retailer of electronics, a rather discretionary category. As the company rebrands itself, investors will have to make do with limited information as the company doesn't hold conference calls every quarter to discuss results. Many analysts will be waiting to get more information on profitability before shedding a bearish attitude on shares. Bottom-line; Barron's would avoid the stock. Reference Link :theflyonthewall.com |
