Stocks to Short #4: RadioShack (RSH)
You might call me crazy for saying that RadioShack (RSH) is a stock to short at all of $2.67 per share, but I just don’t think RSH stock is going to survive.
Net income has been declining for years, and RadioShack reported a loss in FY12 and $271 million in losses for the trailing 12 months. Meanwhile, FCF went negative in FY12 by $110 million, and cash is almost exactly offset by debt.
Anything you can buy at RadioShack can be bought elsewhere because they are all commodity items — and they’re available from Chinese distributors on the Internet for much less than even ultra-cheap RadioShack.
RSH is going nowhere but down. Short it.
As of this writing, Lawrence Meyers did not hold a position in any of the aforementioned securities. He is president of PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at firstname.lastname@example.org and follow his tweets @ichabodscranium.