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| Radioshack |
Results were a bit disappointing, as weak sales trends on the T-Mobile piece and loss of Sam’s Club kiosks dragged strong performance by AT&T and Sprint and the roll barred of Target kiosks. Other than with the aim of, near were rebuff real changes to my thesis throughout the quarter.
However, similar to announcing results, the company announced they were raising $300m of debt (ended up raising $325) in place of broad-spectrum corporate purposes, together with routine buybacks. Given they had basically rebuff get debt by the side of quarter last part and are raising not far off from 1 years worth of EBIT, I think the debt raise is a lofty move. It allows them to good buy back ~20% of their routine by the side of current marketplace prices. I think the routine is substantially undervalued, so it ought to be tremendously accretive to the residual shareholders. The company besides took improvement of low consequence tax to lock in long designate debt by the side of a relatively low charge.
One attention-grabbing observe not far off from the debt raise with the aim of I’ve yet to hear everybody discuss- if you read Fitch’s press liberation reaffirming RSH’s corporate ratings, it talks not far off from RSH paying dividends of “about $30m apiece time.” They at present wage a dividend of ~$25m apiece time, and certain the considerable share buybacks it may well be a smaller amount by the side of this central theme. This may well imply the company is planning in place of a small dividend raise in addition to the share buybacks.