RadioShack Corporation (RSH): Even Up 200%, Best Buy Co., Inc. (BBY) Shares Could Go Higher

Enter Best Buy. In just a few months, by setting up shops in Best Buy, Samsung was able to get a “store” in nearly every major American community. Microsoft then copied Samsung, setting up “Windows Stores” in a majority of Best Buy locations.

This could just be the beginning. As Sony revamps its products, it might also consider partnering with Best Buy, as could Google. Even Amazon, with its expansion into hardware, could do a deal with its retail rival.

Rising tide to lift all boats?

Of course, if a wave of new electronics will soon pull consumers back into stores, investors might consider looking at some riskier plays in the space. Clearly, Best Buy is the best in its class, but greater return could be found elsewhere.

Specifically, RadioShack Corporation (NYSE:RSH). To be clear, the company’s present situation appears disastrous on paper. The ancient retailer has failed to adapt to the shifting tech landscape and is burning through cash.

Some analysts, like Wedbush’s Michael Pachter, believe that the company will be out of business in less than two years.

That’s likely why the company is trading at such a heavy discount. With a book value of $5.08 per share, RadioShack Corporation (NYSE:RSH)’s sub-$3 share price seems to indicate that most investors are expecting the worst. Indeed, nearly 40% of floating shares have been sold short.

But that’s why the potential returns could be so great. If RadioShack Corporation (NYSE:RSH) — supported by a wave of new electronics — can return to profitability, the upside could be huge.

Investing in Best Buy

Best Buy Co., Inc. (NYSE:BBY) has been a great stock in recent months, but I’m not selling yet. Shares have rebounded largely on cost cutting and other corporate initiatives.

The real potential for the company lies ahead. A wave of new electronics will soon appear on Best Buy’s shelves, pulling consumers back into the stores. Meanwhile, Samsung’s success with its Experience Shops could prompt other companies to consider similar arrangements.

Best Buy has been one of the best stocks to own in 2013, and it could continue to reward shareholders going forward.

The article Even Up 200%, Best Buy Shares Could Go Higher originally appeared on Fool.com and is written by Sam Mattera.

Sam Mattera owns shares of Best Buy. The Motley Fool owns shares of RadioShack.

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