Buzz Stocks: RadioShack Corporation, Office Depot Inc, and NQ Mobile Inc (ADR)

Today's stocks to watch in the news include RSH, ODP, and NQ

by Karee Venema

Published on Dec 11, 2014 at 9:24 AM
Updated on Apr 20, 2015 at 5:32 PM

Futures are pointed higher this morning, as traders digest the latest retail sales data and weekly jobless claims. Meanwhile, among equities in focus are retailers RadioShack Corporation (NYSE:RSH) and Office Depot Inc (NASDAQ:ODP), as well as Internet security provider NQ Mobile Inc (ADR) (NYSE:NQ).

  • For the 11th consecutive quarter, RSH posted a loss. Specifically, the company lost a larger-than-expected $1.23 per share in its third quarter, while same-store sales plunged 13.4% -- missing one analyst's estimate for a slimmer 10% decline. It's been a dismal year both on and off the charts for RSH. Technically speaking, the shares have surrendered nearly 79% of their value, and closed Wednesday at $0.55 -- just one penny above their all-time low of $0.54, which was tagged yesterday. Not surprisingly, all eight analysts covering RadioShack Corporation maintain a "hold" or worse rating. Elsewhere, 24.6% of the stock's float is sold short, and it would take almost a month to cover these shorted shares, at average daily trading volumes.

  • ODP, meanwhile, is set to soar 10% out of the gate, after activist investor Starboard Value LP upped its stake in the company to about 10%. On the charts, ODP has rallied more than 27% year-to-date -- thanks in part to a recent earnings-related bull gap -- to trade at $6.72, and hit a four-year high of $7.01 on Wednesday. Should Office Depot Inc continue its trek into multi-year-high territory, a capitulation from skeptics could help keep the wind at the equity's back. Among the brokerage bunch, 67% of analysts covering the shares maintain a lukewarm "hold" rating, while the average 12-month price target of $7.22 stands at a slim 7.4% premium to last night's closing price. Meanwhile, it would take nearly a week to cover all of ODP's shorted shares, at the stock's average daily pace of trading. In other words, a round of upgrades and/or price-target hikes -- or a short-covering rally -- could create a fresh wave of buying power.

  • NQ -- which is slated to unveil its third-quarter earnings report after next Thursday's close -- announced the resignation of chairman and co-CEO Henry Lin. Additionally, the company extended the lock-up period for its founders to December 2016. The stock's been nothing short of volatile, translating into a year-to-date loss of 61% that has NQ Mobile Inc (ADR) churning at $5.72. Pre-earnings option traders have been rolling dice on additional losses, as evidenced by the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.41, which ranks in the bearishly skewed 64th annual percentile.

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