RadioShack Corporation (NYSE: RSH) was supposed to turn around under Julian Day. There may still be reason to expect a victory here Day. He has kept Radio Shack alive by slashing costs. The fact that Radio Shack is still around may be the success. Still, that hardly makes a turnaround.
The company had reportedly put itself up for sale but found no suitors. Three years of sales figures stuck around $4.2 billion might be okay, but the concern now has to be that the estimates of $4.47 billion in sales for this year soon to end and $4.59 billion in sales for next year might be too high. Unfortunately, recent 52-week lows have brought the stock back down to almost $17.00 and that is effectively where it started back in 2006.
Rite-Aid Corporation (NYSE: RAD) is the ugly duckling of the retail drugstore chain business. The company imploded back in the 1990’s after a meteoric rise. Despite many turnaround attempts, this company is struggling amid competition from Walgreen (NYSE: WAG), CVS Caremark (NYSE: CVS) and even Wal-Mart Stores, Inc. (NYSE: WMT).
The company loses money year after year and that is expected to continue. Ride-Aid still suffers from a severe debt load and it said it would lose $525 millin to more than $650 million for the year coming to an end.
5. Sears Holdings
Sears Holdings Corporation (NYSE: SHLD) is a shadow of its former self. Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corporation (NYSE: TGT) are keeping Sears from gaining much traction. The company revamped its management and has had the longest “interim CEO” tenure with Bruce Johnson that we can recall.
Unlocking the billions of dollars in the land it owns underneath the retail store fronts was a goal, but that opportunity to unlock shareholder value has passed and it could be years before it is possible again. Chairman Eddie Lampert’s gains now seem to all be on the hedge fund side of things. Sears has seen a long steady decline in revenues which is expected to continue for this year about to end and for the next year.
6. Sprint Nextel
Sprint Nextel Corporation (NYSE: S) was supposed to do very well when Sprint acquired Nextel. It turns out that Sprint’s business model is expected to remain unprofitable for the foreseeable future. The company is so deeply tied to Clearwire Corporation (NASDAQ: CLWR) and its growing national wireless broadband operations that some argue you cannot consider one without the other. AT&T Inc. (NYSE: T) and Verizon Communications (NYSE: VZ) are extremely formidable competitors and the HTC Evo just has not garnered the same interest as the iPhone.
It is hard to predict whether Sprint could easily unlock value by selling excess spectrum to its competitors. A fresh round of price adjustment in its smartphone plans was not met with much enthusiasm from shareholders. With losses still expected to remain prevalent ahead, it really feels like the only big upside is whether any of the old buyout rumors might resurface. It wouldn’t be advisable to hold your breath for that. At $4.36 per share, the 52-week trading range is $3.10 to $5.31.