2-Star Stocks Poised to Plunge: RadioShack?

Before you go, we thought you'd like these...
Before you go close icon

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, electronics retailer RadioShack (NYS: RSH) has received a distressing two-star ranking.

With that in mind, let's take a closer look at RadioShack's business and see what CAPS investors are saying about the stock right now.

RadioShack facts

Headquarters (Founded)Fort Worth, Texas (1899)
Market Cap$725.8 million
IndustryComputer and electronics retail
Trailing-12-Month Revenue$4.5 billion
ManagementCEO James Gooch (since 2011)
CFO Dorvin Lively (since 2011)
Return on Equity (Average, Past 3 Years)19.3%
Cash/Debt$667.7 million / $666.4 million
Dividend Yield6.9%
CompetitorsAmazon.com
Best Buy
Wal-Mart

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 45% of the 805 members who have rated RadioShack believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those Fools, tompiarulli, succinctly summed up the bear case for our community:

Over the short term there it could go up a bit, simply because its taking such a pounding some might consider it undervalued.

In my opinion it would take a miracle to keep RadioShack going for another 10 years. They have failed to evolve as their competitors have, and even those competitors (like Best Buy) are in serious trouble from companies like Amazon. It may die a slow, painful death, but I don't see RadioShack going anywhere but down over the long term.

If you want to retire rich, you need to protect your portfolio from any undue risk. Luckily, we've found another retailer we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of RadioShack, Amazon, Best Buy, and Wal-Mart. Motley Fool newsletter services have recommended buying shares of Wal-Mart and Amazon, as well as creating a diagonal call position in Wal-Mart and writing covered calls in Best Buy. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners