Circuit City: Price Check, Please

Sometimes, it isn't so great to be first.

As a practical matter, Circuit City (CC Quote - Cramer on CC - Stock Picks) was the first nationwide "big box" category-killing retailer to specialize in consumer electronics, defining a genre that came to be known as the "consumer electronics superstore."

But that was then -- 20 years ago -- and this is now. The stock is trading near its yearly low around $11.50, way off its high of $29.31. That level compares with 1996, although there have been sharp peaks and valleys since then.

So when investors see a good brand go into the tank, I say it's time to look for value. Let's see what we can find.

The search for value takes us into four areas: financial fundamentals , operational excellence, management competence, and -- here's my favorite -- how the company is positioned and how it is doing in the marketplace.

Want more? Check out TheStreet.com TV video. Jennifer Openshaw discusses the stocks of big-box retailers.

With these topics in mind, let's examine. Since this stock has been beaten down lately, let's look at the negatives, or "cons," first:

• Marketplace position and execution. There's been plenty in the financial press about turnaround strategies and performance shortfalls due to emphasis on big-screen TVs and notebook computers. Probably so. A recent store visit reveals more.

I found the store unattractive, not as richly merchandised as competitor Best Buy (BBY Quote - Cramer on BBY - Stock Picks) and frankly, dark, dirty and poorly marked. The bland gray carpet was spotted. A surprising amount of merchandise was marked incorrectly or not marked at all. I began to think it was part of a grander strategy to force you to talk to a sales rep. And when I finally did buy a CD-cleaning kit, I had to wait several minutes for someone to show up at the register -- even though store employees outnumbered customers at the moment.

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