By William Trent, CFA of Stock Market Beat
Circuit City swings to unexpected loss on price cuts – MarketWatch
Shares in Circuit City Stores Inc. (CC) fell sharply Tuesday after the company reported a surprise third-quarter loss, as price wars on flat-panel televisions and other consumer electronics eroded margins. Circuit City, which also lowered its expectations for the year, saw its shares fall as much as 19.8% to a 13-month low of $18.25 soon after the market opened.
How unexpected could it have been after Best Buy’s (BBY) report last week? Some investors need to wake up and smell the consumer slowdown.
The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: Union Pacific (UNP) put options; Air Products (APD) put options; Nasdaq 100 (QQQQ) put options; FedEx (FDX) put options; Intuit (INTU) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Three Five Systems (TFS); IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Landstar (LSTR) put options; Ceradyne (CRDN) put options; Dell (DELL) put options; Plantronics (PLT) put options
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