Radio Shack (RSH)
Radio Shack (RSH: Charts, News, Offers) has undergone a makeover during the last year and the result has been a marked improvement in Radio Shack’s prospects. The question is will the adjustments be enough to allow Radio Shack to cope with pressure from big box electronic stores like Best Buy (BBY: Charts, News, Offers)? Investors certainly think so as Radio Shack’s stock price has risen over $12 during the last twelve months, including a large jump yesterday as rumors circulated that a hedge fund might be interested in buying “The Shack”. Reuters reported that Apollo Management (AINV: Charts, News, Offers) could be one of the potential suitors. The rumors are just rumors, but Radio Shack overall option volume was nine times greater than its recent average daily volume.
Daily Chart
If you are not able to see the chart, your email client probably does not support javascript. To view it, please
click here
Stock Analysis
Radio Shack has always been steady through the years. There seems to be a Radio Shack franchise in every mall or around the corner. Consumers almost take Radio Shack for granted like fast food restaurants or gas stations. In the past, the store’s primary market was the endless array of odds and ends that tekkies and home owners required to connect televisions, antennas, radios, VCR’s, DVD players, computers and a host of other technological devices. Radio Shack sold and still sells televisions, speakers and other electronics, but figuring out ways for those devices to work in the correct configuration to meet the needs of the customer was Radio Shack’s niche.
Not so anymore. Over the past year, Radio Shack has begun to remake its image. Total net sales and operating revenue for 2009 increased to $4.28 billion compared with $4.22 billion for 2008 – during a recession. Some might attribute the revenue improvement to the “The Shack” ad campaign that kicked off in August of 2009, but the substance of a change in product emphasis is more likely. Last year, Radio Shack began to focus on mobility and wireless products from several different brands including AT&T (
T:
Charts,
News,
Offers), Sprint (
S:
Charts,
News,
Offers), T-Mobile, Apple (
AAPL:
Charts,
News,
Offers), BlackBerry and Samsung. Radio Shack jumped into the smartphone market with gusto at nearly the exact time when that market was expanding at an unprecedented rate. The Shack had finally found an area for growth.
It is a wireless world and Radio Shack was smart enough to make the change. Instead of providing wires and connectors for component stereos, Radio Shack is now configuring wireless technology tailored for each consumer. Even the push for digital converter boxes did not do as much for Radio Shack’s bottom line as smartphones and other wireless technology has done. Furthermore, the smarphone market can be intimidating and confusing for many customers and Radio Shack has met that challenge with new incentive pay for the sales staff. The higher pay is an added overhead expense for the company, but it also means that the employee turnover rate is low. There is a knowledge and experience level necessary to make sure that customers are buying the phone that they want and to make sure they know how to use that phone. Experienced staff goes a long way toward making sure that the customer leaves the store satisfied.
Other News about Radio Shack
VN:F [1.9.17_1161]
Rating: 0.0/5 (0 votes cast)
Other relevant articles you may like
Joshua Caucutt is long-time market follower and finance writer. Debt management, entrepreneurship and government economic policy are areas of emphasis. He regularly contributes to the
Stock of the Day analysis.
