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Four Reasons to Respect RadioShack


The results on the revenue line prove it's the real deal.

Well, I enjoyed a 2.5 hour commute home last night, courtesy of drivers rubbernecking an accident on the New Jersey Turnpike. To say I wanted to pull my hair out as we traveled at the breakneck speed of 25 miles per hour would be an understatement.

Asian stocks got thumped overnight. The Hang Seng and the Nikkei were off 1.86% and 1.45%, respectively. European stocks were lower early this morning, too. And here in the US, we're currently trading lower.

Here's what I'm focused on this morning:

RadioShack (RSH):
The store that was a second home to me as a kid (since my father spent so much time in it) released its third-quarter numbers yesterday.

1. The company turned in $0.30, which was short of expectations. But the result on its revenue line is what the chatter is about. It turned in $990 million, which was almost $30 million better than expected. The results showed this company is the real deal.

2. The company has been the Rodney Dangerfield of the electronics business, just getting no respect. But I believe that could change on the heels of this report.

3. The positive results make me feel even better about Best Buy (BBY), too.

4. If the shares punch through a new high, it could go to the low $20s in pretty short order.

Did you happen to get a gander at the glass maker's third-quarter numbers? Excluding items, it put up $0.42, which was a respectable $0.03 better than what analysts had been figuring on. It managed to beat on the top line, too.

Some thoughts:

1. For someone with their eyes on the larger picture (get it?) this line in the release got my attention: "The company anticipates that worldwide unit sales of LCD televisions next year could reach 156 million, a 20% increase over 2009. Additionally, computer notebook sales are forecasted to grow by about 20%, while desktop monitor sales are expected to increase about 4% for the year."

2. The shares actually sold off a smidge in yesterday's session, which isn't surprising given the pummeling the broader markets took. That said, I consider the sell-off to be an opportunity to snuggle up.

3. I see the shares as a real sleeper -- nobody seems to be paying them much mind. But I have this gut feeling that a year or two out, they'll wish they had.

4. As I said in Corning, Like Economy, Is Clawing Its Way Back, a little open-market insider-buying would make me feel more confident.
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No positions in stocks mentioned.

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