12-18 Month Turnaround Plays - Circuit City. AMD, Yellow Roadway

I agree with a lot of the general things you said, but you can't discount that Circuit City (along with Best Buy) is morphing itself into a hybrid of an etailer and retailer, or in other words, the best of Amazon and the best of brick and mortar.

You can't buy something you desperately want on Amazon online and pick it up miles from your house in 24 minutes as you can with Circuit City.

I think this simple aspect of Circuit City's business model is the key to its turnaround.

Cut the fat in the cost structure, grow the already rich revenue stream, and have the b.o.d step up to the plate and get firm with upper management, and you have the makings of a true turnaround play.

The comparisons between Radio Shack, CompUSA, and even worse, Tweeter, with Circuit City is nonsensical.

Circuit City has over 700 stores, in many triple A locations, a deep well of income with gross revenues of 12 billion , and has cash on hand that is over 50% of the value of its present share price.

That is a rare thing. I'm waiting for the big CC buyback, and if it doesn't happen before the very possible private equity (or Eddie Lampert style) buyout, I'll be expecting shareholders to slay current management.
 
CC - In steep downtrend, revenues are declining, and the company loses money.

AMD - In steep downtrend and the company loses money.

YRCW - In steep downtrend, revenues and earnings are declining, but hey at least they don't lose money.

In a bear market (which we may or may not get), fundamentals don't matter much, stocks with great fundamentals will still go down! When or if the smart value money starts believing in these companies, you will be able to tell as when the price stops going down and at least moves sideways for a bit. Buyout? I'd rather take my money to the blackjack table, better odds.

OP? How long have you been trading and do you have any past stocks similar to these that you made money on?
 
Quote from ByLoSellHi:

CC (in @ 3.84) - No debt, tons of cash, 5th most visited website on the web, 12 billion in revenue per annum (CEO is a wanker). Prime for a turnaround in margins and/or a buyout (was almost taken private at $20/share just several months back).

AMD (in @ 7.25) - part of the computing processing duopoly with Intel. Does anyone actually think PC manufacturers want to sole source from Intel? That's like asking to be raped.

YRCW (in @ 14.17) - Incredibly cheap valuation, and a necessary part of the very basics of American (and now international) commerce shipping. Biggest customers include Wal-Mart and Home Depot). Trucking of everything from decking material, groceries, and HDTVs to stores is here for good.


Rumors of the demise of the American Consumer are greatly exaggerated.

(Short term economic volatility notwithstanding)
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I like the way you think BYLO. The only question is the timing, and that's anybody's guess. But eventually, sure.
 
Quote from ByLoSellHi:

Just added 50% to my AMD position with accumulation @ 5.59.

Nice international footprint.
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Good move in my opinion. I will be a buyer around 5 or under. Expect a bounce, even in a bear market, once they have the problems with the Barcelona worked out.
 
Quote from piezoe:

Good move in my opinion. I will be a buyer around 5 or under. Expect a bounce, even in a bear market, once they have the problems with the Barcelona worked out.
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Once they get their quad core platform perfected, and sub out some fab work, which they are planning on doing, it will be smooth sailing.

Barcelona had teething issues. Puma is up next with HD streaming video capabilities.

World PC volumes will only rise over time. The world market is nowhere near saturation, though parts of the U.S. and western europe may be bitten by a consumer pullback (even that isn't definitive, though).

If AMD breaks below $5 support, I'll be happy and eager to add more bargain priced shares to my position.


I remember debating with Dr. Steph not too long ago when she was accumulating AMD @ 12 whether it was wise; needless to say I'm glad I invoked discipline.
 
Quote from Point Hunter:

CC has very little debt.. tons of cash. They are not going bankrupt anytime soon. They just need to find a way to stop losing money and make a few bucks. Fyi, they are also paying a dividend.
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Well too bad CC missed their chance to get profitability. Right now consumers have no choice but to slow down as the the mortgage saga will take years to settle out.

Their best chance is selling the stores or completely reinventing their business model. Out of the box thinking. I highly doubt the current CEO's ability to do anything like that considering his last idiot decision.

The company does seem to be prime picking for a Warren Buffett/Eddie Lambert type investor.
 
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