Last night, old-time electronics retailer Radio Shack (RSH) reported its fourth-quarter earnings and they were very strong. Profits jumped 26% thanks to an increased demand for wireless products and services.
The company earned $75.7 million, up from $60.1 million compared to last year.
It’s fantastic news, especially for an old player like Radio Shack. But there’s just one problem: its stock is currently down 6.16% to $19.36 a share, making it the second biggest loser in the S&P 500 today.
Why are investors shunning Radio Shack?
Well, the market is down as a whole, but that can’t be all of it.
What seems likely is that investors have become uber-greedy, and even strong earnings are a reason to sell.
Traders clearly think that Radio Shack has enjoyed its bull run for too long now. Since June of 2009, the stock has doubled in value and has “double topped,” a technical analysis term that indicates a major sell off is about to occur after an extended uptrend. Keep in mind: this is Radio Shack. Who do you know that shops at a Radio Shack? No one I know goes there.
It will be interesting to see if RSH can hold above $20 a share for much longer.
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