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Strategies & Market Trends : Value Investing

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To: rllee who wrote (46764)	2/28/2012 1:53:31 AM
From: Spekulatius	Read Replies (2) of 78670

>>RSH - I read, with interest, Motley Fool's blog on the valuation of RSH: beta.fool.com Seems to make some sense based on comparisons of sales/sq ft ratios between BBY & RSH. The other question might be how sustainable is the fat 7% dividend. If the dividend is reliable enough, perhaps it is worthwhile to invest to wait for a recovery or a possible buyout?<< It is a very one sided piece that looks at RSH valuation only under the assumption that BBY buys RSH. This acquisition is just a hypothetical exercise right now and it's dangerous to use these assumption for a valuation. Ideally you want to come out ahead in most scenarios, including the most likely ones ( those are rarely acquisitions) when purchasing the stock. I have a different hypothesis on how BBY looks at RSH - they view it as a weak competitor in the mobile space that they can gain market share from. BBY prefers to build their stores in malls with a small footprint where there is much more foot traffic than in RSH's strip mall stores.

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