YTD Return: 50%
Just last year, things looked pretty bleak for electronics retailer RadioShack (RSH). The company suspended its dividend, lost just over $139 million for the full-year and shares of RSH stock dipped below $2 per share by November.
RadioShack didn’t simply roll over, though. Instead, RSH exited a money-losing wireless store-within-a-store relationship with Target (TGT), brought in new management and went looking for help from investment banks to buy time.
That time has allowed RSH to focus on its biggest strategic shift: Opening concept stores which highlight in-demand brands like Apple (AAPL). It’s a high-stakes gamble aimed at essentially rebranding RadioShack as hip and high tech … and it needs to work.
So far, though, little has changed. RSH has yet to see a profitable quarter in 2013, while just-released Q3 earnings showed revenue, gross margins and net losses all headed in the wrong direction. So far today, RSH stock is off more than 12% as a result.
The only good news is General Electric (GE) recently stepped up with an $835 million debt financing plan, and that RSH has around $300 million in cash and nearly $300 million in available credit under the program. That offers a glimmer of long-term hope … but a glimmer hardly seems to justify the 50% climb RSH stock has posted so far this year, even after this morning’s sell-off.