TV is set to go completely digital tomorrow, and as a result,
is poised for a windfall.
This weekend, the 1 in 10 Americans (procrastinators and Neo-Luddites, apparently) who have yet to convert to digital will be scrambling to do so -- and presumably will turn to RadioShack for some help.
Sure, RadioShack is among the worst of breed, but Jim Cramer said during his "Mad Money" segment on Wednesday that Wall Street estimates are too low and don't account for the upcoming surge.
But why RadioShack and not better-performing rival
? Cramer says RadioShack is the go-to place for electronic emergencies, which is exactly what Friday's conversion due date is. (Think about it: Where do you go when you suddenly need, say, a 3-foot high-performance coaxial cable?)
As a result, Cramer predicts analysts will raise their numbers for the company by Tuesday, giving the stock a quick boost. Currently only one analyst has a buy recommendation for the stock, 18 say hold, and one rates the stock a sell.
Shares of the company spiked in after-market trading Wednesday night, after the broadcast of the show, and opened Thursday morning at $15.19, more than 2% higher than the Thursday close.
Indeed, RadioShack has already begun to see some padding from the TV switch. In the first quarter, which ended March 31,
, to $43.1 million, or 34 cents a share, from $38.8 million, or 30 cents, in the year prior.
But this trade only works under $15 a share, not a penny more, and Cramer advises investors to use limit orders when purchasing. If analyst bumps in estimates don't happen by Tuesday, run.
And once the windfall from the conversion is over, Cramer says, there is no real reason to hold on to RadioShack long-term.
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