Today's Retail Movers and Shakers: Radio Shack, J.C. Penney, and Abercrombie & Fitch

Retailers' shares prices can change quicker than the daily deals in their stores.

Mar 4, 2014 at 8:30PM
Longview Fool Image

Retail stocks can be a lot like the merchandise and the sales of the companies they represent -- in constant fluctuation. In this column I like to point out a few notable daily moves from the big retail stocks and help investors figure out whether they should buy, sell, or hold. Today's movers and shakers: RadioShack (NYSE:RSHCQ), J.C. Penney (NYSE:JCP), and Abercrombie & Fitch (NYSE:ANF).

RadioShack was the biggest loser by far, down 17.28%. Not only did the company say it will close 1,100 of its stores, but its quarterly numbers were also brutal. Revenue of $935.4 million fell short of the $1.17 billion in last year's comparable quarter and the $1.12 billion analysts were expecting. Earnings came in at a loss of $1.90 per share, while analysts were predicting just a $0.14 deficit. Weak holiday sales and heavy promotions capped off a 19% sales drop at stores open at least a year.

About 20% of RadioShack's stores will be closing its doors, which should help the company reduce costs and boost earnings, but investors need to watch the inventory backlog as these 1,100 stores start to close. 

Another struggling retailer, J.C. Penney, jumped 4.15% this afternoon. The S&P's rating service increased the company's credit rating from "negative" to "stable" yesterday, and that move follows a 25% stock increase last week, after quarterly earnings came out and management said it anticipates seeing a profit this quarter. If so, it'll be the first time since early 2011. Granted, even with the S&P's move yesterday, the company's rating still resides in "junk" territory, but every little upgrade means the potential that more people will be willing to lend the company money, and at lower borrowing costs. J.C. Penney may need the help if it wants to get out of the hole it's stuck in.  

Finally, an upgrade from "neutral" to "outperform" sent shares of Abercrombie & Fitch up 6.68%. Citing Abercrombie's cost-cutting measures, reduced square footage, tighter inventory control, improved policy on returning cash to shareholders, and hard focus on its online presence, Credit Suisse also raised its price target on the stock from $36 to $52. It all sounds great, but keep in mind that this is one analyst's opinion and the world of teen retail can be as fickle as its customers.

Looking for the next big thing? Look no further
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Matt Thalman and The Motley Fool have no position in any of the stocks mentioned. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information