For those investors looking at some of the biggest names in retail such as Best Buy (BBY +1.18%), Radio Shack (NYSE: RSH), and J.C. Penney (JCP +0.00%) and watching these ailing companies struggle to find the right ingredients for a turnaround, Motley Fool analyst Blake Bos has some advice. He talks about how it might be a good idea to hedge your risk by buying a basket of stocks rather than one, and by making this a small rather than a large part of your portfolio, as retail is a very volatile sector right now. He also suggests buying protective puts or selling covered calls on these stocks as ways to mitigate some risk or increase your returns, but warns that using an options-based approach is something you should understand fully before you pursue it.
How to Invest in Struggling Retailers
By Blake Bos and Isaac Pino, CPA – Dec 4, 2012 at 1:45PM
NYSE: BBY
Best Buy
Market Cap
$17B
Today's Change
(1.18%) $0.98
Current Price
$83.86
Price as of October 28, 2025 at 4:00 PM ET
Some tips on how to hedge your investments in declining retailers for a profit.
About the Author
A home grown Kansan and largely self taught investor. I wouldn't classify myself by any particular investing style, just opportunistic. My dream investment would have a greater than 10% free cash flow return on enterprise value and be growing at above industry average rates. Some of my favorite industries to watch right now are: alternative energy, manufacturing, agriculture, infrastructure, and media content production companies. Follow me on any of the social media websites below for the most important 3D printing industry developments and other great stories.