Buzz Stocks: RadioShack, Office Depot, NQ Mobile

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 Jul 1, 2020 at 5:12 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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