Another 52-Week Low: Circuit City (CC); Any Value Yet?

How fast the world can change in retail, particularly when you are a troubled technology retailer.  Circuit City (NYSE:CC) is hitting yet another 52-week low this morning.  The company stock is down with the weakness after warnings out of Lexmark, Home Depot, and Sears. 

With shares down over 3% at $14.65 today, Ciricuit City is officially trading down 50% from the 52-week high of $29.31.  Unfortunately the company is at a different point in its cycle than when this had a private equity offer that it rejected.  Back when that occurred the company was recovering on its own and had at least some things going for it.  Now it has let their more savvy and expensive sales techs go in favor of the lower-wage workers that know less than the semi-educated customer.  The stores are also far from the hip and bustling Best Buy stores it competes against, and earnings guestimates are as diverse as the United Nations.

After the big drops of late we have looked at this numerous times trying to see if the old private equity buyout offer of $17.00 from Highfields Capital in February 2005 was relevant.  Anything is possible, but the value of Circuit City today looks far different than it did then.  Anything is possible, but a buyer in 2007 would be much more of a turnaround buyer rather than a value buyer.

Jon C. Ogg
July 10, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.