We upgrade our recommendation for RadioShack Corp. (RSH) to Outperform based on our assessment that the company is likely to improve its earnings in the future quarters as a result of a significant boom in the wireless industry. RadioShack is one of the most experienced and trusted consumer electronics specialty retailers in the U.S. with approximately 4,470 company-operated stores; almost 1,300 dealer outlets; over 450 wireless phone kiosks throughout the U.S. and approximately 200 company-operated stores in Mexico.

The wireless category, which represents one-third of total sales, is likely to continue its impressive performance in the near future. RadioShack generated increased revenue from Sprint Nextel Corp’s (S) postpaid wireless business. The introduction of T-Mobile, a division of Deutsch Telekom AG (DT), in company-operated stores and Verizon Wireless (VZ) in Sam’s Club Kiosks has enhanced RadioShack’s mobility proposition. The company now offers a broad range of products from AT&T (T), Sprint Nextel, T-Mobile, and Verizon Wireless. RadioShack has also started selling Apple Inc’s (AAPL) 3G iPhones in 10 company-operated stores. Management has decided on the nationwide availability of 3G iPhone in 2010.

RadioShack has an outstanding 5-year average return on equity (ROE) of 27.33%. Its average ROE for trailing twelve months is 20.8%, significantly higher than the industry average of just 16.2%. The company also pays a dividend, with a current yield of 1.28%. We expect the company’s Return on Invested Capital and free cash flow to increase in the future quarters due to the massive boom in the wireless industry.

Zacks Investment Research

1. (RSH) RadioShack Corporation – iPhone Expected to Boost RadioShackRadioShack Corporation (RSH) has surprised on estimates 2 out of the last 4 quarters by...
2. ($RSH) RadioShack Corporation Initiated as NeutralWe initiate coverage for RadioShack Corp. (RSH) with a Neutral recommendation. The company is one...
3. ($RSH) RadioShack Delivers in the Third QuarterRadioShack Corp. (RSH) announced its third quarter results today. Net revenues came in at $990 million, down...
4. (RSH) RadioShack Corporation – Value – Zacks Rank BuyRadioShack Corporation (RSH), the electronics retailer, surprised on estimates by 54.55% in the first quarter...
5. (RSH) – RadioShack – Begins Share Repurchase ProgramRadioShack is bucking the challenging retail environment as it continues to increase sales. The company...
6. (RSH) – RadioShack – Begins Share Repurchase ProgramRadioShack is bucking the challenging retail environment as it continues to increase sales. The company...

Search Posts by Tag: AAPL | Apple Inc. | AT&T Inc. | Deutsche Telekom AG | DT | RadioShack Corporation | RSH | S | Sprint Nextel Corporation | T | Verizon Communications Inc. | VZ | Electronics Stores | Services

RSS Feeds by Tag: AAPL | Apple Inc. | AT&T Inc. | Deutsche Telekom AG | DT | RadioShack Corporation | RSH | S | Sprint Nextel Corporation | T | Verizon Communications Inc. | VZ | Electronics Stores | Services |

Other Posts by: vitalstocks | RSS Feed for this author