Best Buy Co Inc (NYSE:BBY) and RadioShack Corporation (NYSE:RSH) were pitted against each other in terms of the success they are getting in their turnaround efforts in a discussion Joe Feldman had with CNBC.
According to the Telsey Advisory Group assistant director of research, Best Buy Co Inc (NYSE:BBY) is doing a better job as it has made a lot of progress, has cut costs and fairly stabilized sales. Feldman also mentioned that the recent announcement by the company to increase its quarterly dividend to $0.19 from $0.17 is reflective of the fact that the company is feeling good about cash flow and is rewarding investors for being in the stock.
On the other hand, a dimmer picture of RadioShack Corporation (NYSE:RSH) was painted in the discussion with the analyst. According to Feldman, RadioShack is seeing a continuous struggle to increase traffic in their stores. Furthermore, he said that the company is losing relevance.
Asked whether it’s too late to turnaround the company, Feldman said it’s hard to say it’s too late but it will take a lot to revitalize the company. He added that the company needs to answer what people will need RadioShack for. It has to be more than selling mobile phones and related merchandise, he noted.
CNBC also asked Feldman whether RadioShack Corporation (NYSE:RSH) can take a page out of the turnaround Best Buy boss Hubert Joly has been implementing. According to Feldman, what Best Buy Co Inc (NYSE:BBY) has done so well is to keep their prices down to be the same as what Amazon.com, Inc. (NASDAQ:AMZN) and other web retailers have. This makes the company more competitive, he noted. He said that RadioShack does not have this element at the moment.
Watch the video below where Feldman also discusses the transformation of companies given that online shopping is increasingly becoming the norm. In the video, Feldman controversially said that Wal-Mart Stores, Inc. (NYSE:WMT) may actually outperform Amazon.com, Inc. (NASDAQ:AMZN) in the future.
Shareholders in Best Buy Co Inc (NYSE:BBY) includes Cliff Asness’ Aqr Capital Management with 3.07 million shares in the company at a value of $81.11 million. Curtis Macnguyen’s Ivory Capital (Investment Mgmt) also reported 1.62 million shares in the company by the end of March.
Litespeed Management managed by Jamie Zimmerman had about 9.7 million shares in RadioShack Corporation (NYSE:RSH) as of the end of the first quarter. Dmitry Balyasny’s Balyasny Asset Management also reported about 1.56 million shares in the company by the end of March.