2-Star Stocks Poised to Plunge: hhgregg?

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

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

hhgreggfacts

Headquarters (founded)Indianapolis (1955)
Market Cap$234.8 million
IndustryComputer and electronics retail
Trailing-12-Month Revenue$2.6 billion
ManagementCEO Dennis May
CFO Jeremy Aguilar
Return on Equity (average, past 3 years)20.1%
Cash/Debt$4.3 million / $0
CompetitorsAmazon.com
Best Buy
Wal-Mart Stores

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

On CAPS, 16% of the 318 members who have rated hhgregg believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star FourBees, succinctly summed up the bear case for our community:

H.H. Gregg sells large, high ticket items like televisions, appliances, and mattresses. This business has large entrenched competitors that are not going away. ... Amazon threatens to move these products to an Internet sales venue. ... All their products are purchased very infrequently by consumers, so there is no regular walk through traffic. Now same store sales are down at a time when new construction and big ticket retail is rising. This is a signal that the thesis behind these stores is flawed.

If you want market-topping returns, 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 theTrackPoisedToCAPS account.

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