I don't see an upside for Circuit City unless the following occurs: 1) The entire executive management team is replaced. 2) The company gets back to focussing on sales at a retail level and retaining experienced employees in the stores. At this point, the current strategy will lead Circuit City to either look like Comp USA (closing stores & shuttering the business) or bought out for pennies on the dollar by a private equity firm. Circuit City: A continuing sad saga http://hingefire.blogspot.com/2007/12/circuit-city-continuing-sad-saga.html
to bylosellhi... i'm somewhat cautiously intrigued at turn around stories now. you put up some interesting ones and couple that with the article i saw in barron's about the riley "index" and it makes me want to start scrounging around for some stuff. the riley index is described here http://online.barrons.com/article/SB119949 050213868843.html?mod=yahoobarrons&ru=yahoo it is basically cash rich small cap stocks with little debt and the scan turned up a ton of tech stocks. the CC with the dividend looks interesting but as someone else has said they need to boot out management to have a chance. also, the CHS like another poster mentioned seemed interesting since they have no debt and they are trading near cash+book value. i was also looking at BWS. it seems interesting as well since they have the dividend. i dunno i need to run thru more retailers to see how common this is. just doing some thinking out loud....
also bylosellhi why do you like YRCW over ABFS? ABFS has 5.85/share cash and only .76/share debt. YRCW has 3.62/share cash and 26.67/share debt. what differentiates the 2 for you?
why would you buy a stock like AMD when there are hundreds of better stories out there. you are falling into the trap that many novice investors fall into. buying a stock that is at all time lows and looking at where it was a year ago when that was then and this is now. a year ago amd was ok but intel was asleep at the wheel. they woke up and business for them is slowing. why would you buy a semi conductor compant at the start of a recession and why would you choose one that has the worlds biggest competitor?
Even the BEST stocks will take a hit in a recession. Bulls need a solid recession to see what a REAL BEAR mkt is like. These last couple of decades have been a cake walk for bulls with ever lower interest rates. How long can that go on? DEBT is what slams the consumer,worry about his or the wifes job also keeps the checkbook closed. DO NOT take last Fridays jobs report so lightly. Stocks can go down 50% in a recession. This small crack is nothing yet if we are going into a dandy recession. Go back and review a couple BEAR mkts and weep Recession of 1973 1974 times was a beauty...........can any of you take the "HEAT" of a decline like that if you start bargain hunting sop early? I think not. Better to wait for a base and then go fishing. How many out there have been in a REAL BEAR mkt? Sure we might not be heading into a dandy, but any trader with "trader CHOPS" knows timing is everything. Fundamentals of individual stocks are meaningless, they are yesterdays stats. Get modern and play the short side of stocks (not many retail do that or can afford to do it), just play the ES, ER2, NQ, think about contribution to my retirement account. .. What a sweet start to new year. COME TO PAPA ..
YRCW is amazingly cheap on P/E and P/S ratio basis. It also is the largest LTFC (less than full cargo) carrier in the country, and just bought out many of its' competitors (at higher values than it should have, hence its recent 750 million impairment charge). When crude oil prices fall and cyclical stocks revert to mean, which they inevitably will, YRCW will seem so cheap in retrospect that it will seem incredible that it could have been picked up at these levels. Also, YRCW is shipping inflexible goods and products (cigarettes, milk, groceries) that people need even during economic slowdowns, so even factoring for the price of diesel fuel, it is an odd hedge against inflation in certain respects. AMD is great because there is simply no way anyone can rationally think that HP, Dell, Lenovo, etc. will ever allow Intel to be the sole supplier of PC processors. It won't happen. Intel is larger, and has taken a temporary edge, but AMD and Intel effectively have a true duopoly, and AMD is not going to go down no matter what. In fact, the major chip purchasers will prop AMD up at any cost. Just my opinion, backed up by my conviction if the form of cold, hard cash, as I'm long.
<p>The question here is, what is the future of Brick and Mortar electronics store. Electronics is no longer a retail niche. Every retailer, it seems is looking to get into electronics. I think the consumer is going to keep buying electronics, but where and how they buy it is the question. Office Depot for example does as a good a job selling computers as CC. Costco is selling LOTS of flat screens. CC has devoted lots of square footage to DVD's, CD's, and software, but as news from the CES showed there are a lot of delivery systems on the horizon, that make buying CD's and DVD's from brick and mortar a dying thing. BBY seems to be doing a better job and I would think it will survive. CC has not had very good management and it shows in the bottom line and stock price. As far as I can see CC 's biggest asset is it has created a stong brand in the market place, but as Toys R US found out, they were in the right business with a strong brand and they let the parade pass them by. I get the same sense with Circuit City, and retail of any niche is more competitive and unforgiving than other kinds of businesses. I see no turnaround, and the best scenario is a buy out but retail buyouts do not affect stock price as much as others.