1 Cheap Stock That Can't Stop Crashing

Today, analysts Blake Bos and Austin Smith look at one consumer-goods stock that can't stop crashing -- RadioShack. The company is down 79% over the past year and has a ridiculous 42% of its shares sold short. With former CEO Jim Gooch stepping down, investors may finally get the new management that's needed to turn around this ailing retailer. Despite its crazy-cheap valuation, our analysts characterize this company as one whose turnaround story is perpetually around the next corner.

One reason to doubt that the turnaround won't pan out as promised is the inherent pressure from low-margin smartphones such as Apple's record-setting iPhone 5.  

Apple is the most influential company in technology, and its blockbuster products make it difficult for retailers to turn much of a profit. However, maintaing that torrid pace will only get more difficult. If you're looking for a recommendation on how to play Apple along with continuing updates and guidance on the company whenever news breaks, we've created a brand-new report that details when to buy and sell Apple. To get started, just click here now.

Austin Smith owns shares of Apple. Blake Bos has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Best Buy, and RadioShack and is short RadioShack. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On October 03, 2012, at 11:44 PM, BenFE08 wrote:

    First off - Gooch didn't "step down", he was fired.

    Second - Radioshack's slid downward started with Julian Day and continued with Gooch, Day's 'chosen successor'. The reason? Neither had ANY proven successful retail management experience. NONE!

    Day sent the company into the tailspin of transforming into Cellular Shack. He recruits middle and upper management from the failed Blockbuster. It didn't work. He tried selling the company. It didn't work. And still the stock slowly fell. Day "retired". In comes Gooch with more managment "help" from the failed Blockbuster.

    Gooch clearly had no idea what he was doing. He simply followed Day's playbook and it failed and the stock kept falling, but quicker.

    Both actively discharged and fired knowledgable and experienced personnel that had been proven money makers for the company, replacing them with ultra cheap imitations with no knowledge or experience.

    And in all this - the BOD not only let 1 fiasco happen, they let go on with the 2nd and for a period of 6 years.

    IF RSH can be saved, it's going to take someone who really knows retail and knows how to manage a retail company, not some idiot who only knows stock options and how to read a spreadsheet.

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