If this one stays down here for any length of time...
...private equity will come in, and try to take it private. Price: $10+
They could get rid of the incompetent CEO and board (these idiots should eliminate the dividend, and use the money to buy back stock), get the EPS back up to $2...and take it public again around $25 in a few years.
Prof, thanks for your input. I, too, have and accounting degree, but the market, to me, is a card game. I did buy some Citigroup at a low and GE too. Those to me are solid. But I have a feeling about RSH (again, a feeling), and bought in the $7s a bit ago, and again at $5.27, recently. I hope I have a straight flush, or at least, four of a kind. Time will tell.
Given my track record of investment success/failure, I am the last person to whom anyone should look for investment advice. I am living proof that an understanding of accounting is no guarantee of investment success. I used to do well with my investments, but then I started buying and holding. That strategy works well as long as one buys the right companies, but I bought Lucent and RSH, and both have cost me big bucks. So I seldom give investment advice. I don’t want to be responsible for anyone losing their hard-earned money in the stock market.
The stock market pretty much has turned me OFF. After many years of investing, I believe the best strategy is this one: Wait until the market overall goes down big time. Then buy good solid companies with a long track record of profits and good management, and wait for the market to recover. Unfortunately for me, at my age (71), that strategy, sound as it may be, is hardly applicable. The luxury of time is running out on me.
I also object strongly to executive compensation policies in most publicly-held companies. Those policies don’t provide the incentives that I believe benefit shareholders like me. That’s just one more reason for me to avoid further forays into the stock market.
I do not believe that anyone consistently can time the market. The system is too complex for anyone to be able rationally to predict future prices UNLESS they have inside info. Without such info, short-term price changes are just a guessing game. For what it’s worth, that message is the one in Burton Malkiel’s book (A Random Walk Down Wall Street). Vanguard’s John Bogle also agrees with it, and it’s the thinking behind the index fund.
Bill, I own/control (guardianship) at this point a little more than 35K of rsh. It has been over 20 years with employer match. I joined this board to seek the knowledge of others. I have some other stock, but NO WHERES in the same ball park as rsh. With the small amounts that I have elsewhere, no I do not move in the same direction with each, because each has different patterns; each has different BODs and CEOs. My gut reacts differently to each, but it is saying that rsh is going to either replace Gooch or get bought out and the price will go up, at least for a short time, and I can sell some for a gain. I have never sold my rsh, again the company was matching (80%). Thus, I get back to asking for advice from those who know what there doing, and not those that five star themselves. Give me your input, Prof.
An earlier post of yours said that you own/control more than 30K shares. Now you post: "I just bought another 1000 shares...." You must not believe in diversification. For me, 35K shares of RSH would be enough, but I am not you.
For all I know, you may own/control thousands of shares of many companies whose share prices do not simultaneously move in the same direction.
longtime, Sadly you are likely correct about the eventual takeout price here being around $10/sh, and PE will revamp the company like you stated and do an IPO 24 months from now in the mid $20's! It's too bad because with the higher margin store expansion into Mexico, S.E. Asia and elsewhere(PR still upcoming on this one) the company could make all the proper changes itself and get the SP back to the $20's in 18-24 months!