RadioShack Corporation (RSH), Best Buy Co., Inc. (BBY): Four Red-Shirt Retailers Destined to Die

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Fans of the original Star Trek series know that being beamed down on a U.S.S. Enterprise mission while wearing a red shirt can be hazardous to your health.

The extras typically cast as engineering, security, and operations characters accompanying the show’s stars — standing out in their red shirts — were easy pickings for the baddies. They may beam off the ship with confident swagger, but they’re destined to perish as casualties of intergalactic combat.

Star Trek Into Darkness hit theaters this weekend, so I figured now would be a good time to go over a few stocks destined to perish. These stocks bounced nicely off their recent lows, but they’re most definitely wearing red shirt.

Everyone but the longs know how things will end.

RadioShack Corporation (NYSE:RSH) : Up 121% since hitting 52-week low Why are we excited about RadioShack again? The retailer’s push into mobile has gnawed away at margins, and there’s little left to get excited about here.
RadioShack Corporation (NYSE:RSH)

Sales fell in 2012, and analysts see another slide this year and yet again in 2014. RadioShack Corporation (NYSE:RSH) posted a loss last year, and Wall Street sees annual deficits continuing through at least 2016 — and that’s if the chain even lasts that long.

RadioShack Corporation (NYSE:RSH) may have thought it could use its attractively leased strip-mall locations to stand out by offering wireless devices across the major carriers, but telco providers know how to keep customers buying directly after they land them.

Best Buy Co., Inc. (NYSE:BBY) : Up 140%
The consumer-electronics superstore reports on Tuesday, and analysts are already braced for a sharp drop in profitability and a modest decline in revenue.

Best Buy Co., Inc. (NYSE:BBY) is in much better shape than RadioShack Corporation (NYSE:RSH). It’s profitable, at least. However, what becomes of these cavernous stores that used to stock CDs, DVDs, and video games as media consumption continues to migrate away from physical copies?

Right now, Best Buy Co., Inc. (NYSE:BBY) benefits from the digital migration as folks buy tablets, smartphones, and smart TVs from Best Buy Co., Inc. (NYSE:BBY) — but what happens when they don’t need to return to Best Buy Co., Inc. (NYSE:BBY) for media? What happens when more people realize that these same products can be had for less online? Best Buy Co., Inc. (NYSE:BBY) will need to shrink its footprint in the coming years or start selling boats and RVs.

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