Stock Tip: Buy Circuit City (NYSE: CC) !!!

Self | 4-13-08 | Self

[UnBubba]

Circuit City (NYSE: CC) is currently trading at $3.90/common share.

Goldman Sachs (GS) is acting as a financial adviser to Circuit City (CC).

Investor Mark Wattles, a holder of over 6.5% of Circuit City stock, is hounding Circuit City Executive Management to fire their CEO and Board of Directors.

The stock price has bottomed out.

The company has net book value which is 200% higher than it's market capitalization.

Circuit City is a prime target for a buy-out.

The company has very little debt and over $11 Billion in annual sales.

The company has hoards of cash and an incredible amount of untapped credit.

Circuit City has trimmed costs, has a strong working capital, and have prepared for the current economic slowdown.

What more can I say?

[UnBubba]

I can see a merger between Circuit City and Radio Shack. We can call it "Radio City". Otherwise, Circuit City can be absorbed by Best Buy, Sears, Walmart, Costco, or a private equity firm.

I see Circuit City going to $5.00 per share soon. If a third party shows interest in them the price can go much higher.

GXK

[Southack]

Brick and Mortar retail fascinates me...because people still buy that way.

Mind boggling.

< cue informercial voice >

“You too can pay twice the price of internet/mail-order”

< /infomercial >

[ConservativeMind]

You are crazy.

Circuit City, in a cost-cutting move, let go of most of their best (more-highly paid) salesmen a handful of months ago. They have a back-asswards rebate process when compared with Best Buy. Also, they don't know how to put together decent sales versus the competition in the retail space (Best Buy).

Circuit City is not the “Buy” you claim it to be.

Let me guess, you are trying to offload your shares at a higher price?

[buck jarret]

Walmart has no need for Circuit City. Sears has major problems. Best Buy might be a regulatory issue. Private equity can’t borrow from the banks. Is it so likely that these retail companies will want to add on debt to buy a competitor in a recession? This stock will have to stand on its own, or not.

[papasmurf]

You are crazy.
{snip}
Circuit City is not the “Buy” you claim it to be.
Let me guess, you are trying to offload your shares at a higher price?

I can see both viewpoints. IF they ashcan their CEO, it would be for the reasons you state, since sales are down, ticket averages are down, customer count is down, and brick and mortar competition is down. Even in a weak economy, they should be more creative and aggressive.

If this were to happen, the stock should move upwards. No?

[The_Republican]

Your prediction may end up being right. Technically it doesn't look all that great YET.

http://stockcharts.com/charts/gallery.html?CC

IF it forms a BASE at 3.4-3.5 or so (big volume supports it) then you have a good entry point.

Then to ALL who do buy it, MUST put a HARD STOP LOSS at 3.2 or 3.1.

Riding a stock in downward spiral is the BIGGEST mistake one would ever make. If it loses its support at 3.4, you never know where it would end up next.

Its always better to lose some money than all of it. You can re-invest the SAVED money and get it right end up in green. But if you choose to ride it downwards, kiss your money goodbye.

HAPPY TRADING.

[Westlander]

Circus City will evolve into the foray of vacant buildings.

[kingu]

I'd be very interested to know how much they're into their vendors for software, music cds, DVDs - if they're sitting on cash and not paying out those accounts, then what we're going to simply see is executives getting good rewards, and another going out of business sale.

[tdscpa]

Circuit City had highly-paid salesmen? Ha!

Any Circuit City employee ever paid more than minimum wage was overpaid.

[Spktyr]

I see Circuit City going bankrupt because they’re run by idiots, they only employ idiots (experienced workers are fired) and the Internet is eating their lunch.

Heard from Incredible Universe lately? Or CompUSA?

[bannie]

What happened to Comp USA? I headed out to our local store last weekend...and it was closed!

[Spktyr]

Wow, you really need to get out more often.

CompUSA died a slow lingering death of stupidity and went out of business on Pearl Harbor Day, 2007. That’s the day they were bought by Specialty Equity, an affiliate of Gordon Brothers Group (the people who liquidated them).

Unfortunately, there are now 21 “All-New CompUSA®” stores open (with seven more to come). However, they seem to be an impending failure, so this brand hopefully will be gone soon. They’re being managed by the same group of idiots as before - TigerDirect (the new owners) hired a lot of CU idiots over the years.

I do hope you weren’t a loyal CompUSeless shopper. If you were, as a former employee, I can tell you you were being taken if you shopped there any time between 1995 and the day they closed.

[bannie]

I hardly ever went there. It's close to my parents’, so I figured I'd swing by one day.

HA! I guess I do need to pay more attention!

[Vio24]

I couldn't agree more. I just bought the same computer I saw in Radio Shack (HP Slimline 3400s), maxed out pretty much and got it for about $130 less PLUS free shipping.

I envision a future where todays brick and mortar stores are merely display cases for merchandise. Customers can see and touch items and then order them for shipment to their homes in a few days.

[Moonman62]

If it doesn’t work out can we sue you for giving bad advice?

[Loyal Buckeye]

Circuit City was crappy when it was at its best, IMO.

[Diana in Wisconsin]

Skip the market altogether. Buy gold and silver (coinage, not certificates) while they’re heading down right now. They’ll be back up in a matter of months, whereas CC will be a memory.

You can thank me now and thank me later. :)

[martin_fierro]

I can tell you you were being taken if you shopped there any time between 1995 and the day they closed.

Hey now!

I bought a generic ergo keyboard with inegrated touchpad mouse there circa 1995-7 and still love that thing.

But that was about it

The keen competition in Sillycon Valley helped keep CompUSA honest. But ultimately they couldn't keep up.

[martin_fierro]

Skip the market altogether. Buy gold and silver (coinage, not certificates) while they’re heading down right now.

[Doohickey]

I usually follow stock tips I get unsolicited in my e-mail.

Since I live in the city where CC is headquartered and know several who work, or used to work there, I can tell you that CC is a deeply dysfunctional company.