NEW YORK (
TheStreet) -- With QE3 in full swing and $40 billion a month in cheap money flooding the market, it's no wonder there are very few oversold stocks to select from.
I am surprised at some of the gifts in this week's list. I find the market often makes little sense in how companies are priced. Emotion rules the day, but not the longer term and that is what gives us the ability to buy low when others are scared and profit when others are brave.
RSH data by
(RSH - Get Report)
: RadioShack is one of the nation's largest and most trusted consumer electronics retailers in the U.S., and offers both on- and off-line shopping convenience. The company was founded in 1899 and is headquartered in Fort Worth, Texas. RadioShack Corporation trades an average of 2.8 million shares per day.
Fourteen out of 20 rate RadioShack a hold. Zero recommend a buy and six recommend selling. The average analyst target price for RSH is $2.72. For the most part, analysts have written the stock off.
After only 16 months, the CEO Jim Gooch stepped down under the pressure of falling revenue and share price. Gooch continues an exodus of C-suite members departing RadioShack.
Chief Marketing Officer Lee Applbaum resigned in March and Chief Merchandise Officer Scott E. Young left three months later in June. A change in thought may be just what the doctor ordered.
RadioShack is now offering a branded cellphone service reselling cricket wireless. The no contract segment in the wireless space is fast growing, but also lowest profitability per customer. RadioShack is more or less entering into a race to the bottom with other carriers. RadioShack will have to execute flawlessly to succeed.
Because flawless execution preceded the C-suite staff exits, RadioShack is a higher risk than the others in this report. You may be better off thinking in terms of having fun rather than marriage here. If you can grab 30% to 40%, maybe call it good and see if the price retraces for another buy. Rinse and repeat.
RadioShack ended dividends for an indefinite amount of time. I would not count on a dividend renewal for at least two quarters after the company posts profits on the board.
In the previous RadioShack earnings release on July 25, the closing price was $2.60. Shares are almost even at 1.5% lower.
One area that doesn't look good is the short interest. The short interest is altitudinous and is a strong warning that short sellers expect the share price to fall considerably. The short interest is 42.3%. There is a flip side to the coin though, if a catalyst pushes shares higher a short squeeze could choke the daylights out of short sellers and leaving short sellers twisting in the wind.
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