Seared

Evan Newmark has a good analysis of Sears Holdings today. I really can't see any reason to hold this stock: All the old reasons don't seem to pertain any more.

Eddie Lampert has given up on the idea of running it as a hedge fund, and in any case Sears is losing money, which means that Lampert can't invest its free cash flow. The US consumer seems to have given up on spending money in general, and certainly spending money at Sears in particular. And the company's much-vaunted real estate holdings are basically very large chunks of aging shopping malls which are looking increasingly more like liabilities than assets. I mean, who would buy those things?

Newmark reckons that the stock won't fall much further unless and until Lampert's buy-side buddies - people like Bill Miller and Bill Ackman - desert him. I suspect that day might not be too far off. Smart investors cut their losses, after all.

Comments

[bulrun100]

Sure might as well sell basicly all retail besides WMT,COST,or BBY! Way to jump on SHLD while its down!

[MSF]

Is it possible Lampert is going to buy all outstanding shares with a buyout with his hedge fund.

[MSF]

In other words the shareholders lose out.

[MSF]

''LOSE MONEY'' WITH JIM CRAMER

MY BUDDY PAL EDDIE LAMPERT

MAYBE SEARS AND LAMPERT SHOULD START SELLING CHEESEBURGERS.

[MSF]

SEAR'S CHEESEBURGERS

[MSF]

CRAMER SAID TO BUY AT $180.

LOL

[123]

"Sears is losing money, which means that Lampert can't invest its free cash flow"

This makes no sense at all, unless I missed something here.

[MSF]

There is an article on Lampert possibly buying out all the remaiming shareholders with his hedge fund.

It does make sense he can offer a small premium and the shareholders get screwed but his hedge fund does well.

[123]

I meant the quote from the original article doesn't make sense

[bulrun100]

ITS FUNNY EVERYONE GAVE UP ON BRK-A AT 60,000.00 BECAUSE WARREN LOST HIS TOUCH AWHILE BACK.HOW'D THAT WORKOUT $130,000.00 NOW!

[bulrun100]

I THINK THIS GUY SMOKING SOMETHING.AS ALL INVESTMENTS SHLD IS LONG TERM.YES THE VALUE OF THE STORES AND LAND HAVE TAKEN A HIT BUT DOES THAT MEAN THEY HAVE TO BE SOLD NOW.CHANCE ARE YOUR HOUSES VALUE HAS TAKEN A BIG HIT,HEY WHY NOT THROW THAT UP FOR SALE??! MAYBE YOUR BRINGING IN A LITTLE LESS MONEY,YOUR DEBT HAS RISEN IN THESE TOUGH TIME ARE YOU SEARED?MAYBE A LITTLE JUST LIKE MOST OF THE RETAIL STOCKS DOWN 50-60% THIS YEAR(LOW,HD,M,JCP,TGT ETC).

[123]

this isnt warren and this isnt berkshire

[bulrun100]

THANKS FOR POINTING THAT OUT! NOT COMPARING THE TWO PEOPLE . THE THROWING THE BABE OUT WITH THE BATH WATER BEARISHNESS THAT COMES AROUND EVERY ONCE IN AWHILE EVEN HITS SOME OF THE GREATEST INVESTORS.JUST WANTED TO POINT OUT THAT THE SAME EXACT THINGS WERE BEING SAID ABOUT THE GREAT BUFFET.INTELLIGENT PEOPLE LIKE THEM DON'T JUST LOSE IT THE MARKET JUST DOSEN'T AWAYS SEE WHAT THEY DO.IF SOME OF YOU HAD A INVESTMENT HISTORY YOU WOULD BE ABLE TO SEE THE SIMULARITIES.

[fxtrader07]

ackman is smart and might exit someday. Miller has never really been smart and might ride this one down, too - as he did with countrywide, citi, homebuilders, bear stearns...

[123]

bulrun, you're long just because of the manager. this isn't always a great idea, as people make mistakes. ie buffett made a huge mistake in buying berkshire hathaway. lampert made a pretty big mistake in buying citicorp just recently (amazing considering he worked for an investment bank and wouldve been thought to know how to value one). buffett bought BUD I think 3 or 4 years ago and that stock is now only about 40% higher today, which is like 10% annualized. he has held wmt also for about 3 years at least and that stock has gone almost nowhere. these guys are human and make mistakes.

lampert hasn't been able to do many, many things at shld. he hasn't been able to expand the store base, as far as I know. he hasn't been able to boost operating margins. the company has $50B of sales, and if you slap an industry average operating margin on that, this is a much more valuable company, but he just hasn't been able to do it.

can you come up with a reasonable independent valuation of the company far in excess of its current market value? Im obviously no expert, but I sure cant. i think the current valuation reasonable but not extremely cheap, but that's just my opinion

[bulrun100]

IN THIS MARKET AND ECONOMY ITS NOT CHEAP AND I NEVER SAID IT WAS.THIS STOCK WILL FOR THE MOST PART TRADE WITH THE ECONOMICS OF THE COUNTRY(HOUSING,INFLAT... ETC).BUT IN CLOSING I WISH PEOPLE WOULD COMPARE THEY'RE NUMBERS TO COMPANIES IT THE SAME SPACE LIKE LOW,HD.COMPARING THEM TO WMT OR COST IS RIDICULOUS.THEY ARE BETTER RETAILERS PERIOD AND IN COST SITUATION THEY ALSO HAVE A GAS ELEMENT WHICH ADDED 10% TO THE SALES THEY JUST ANNOUCED.

[bulrun100]

Retail as a whole is struggling, but Sears is seeing declines that are worse than those experienced by a pair of its closest mid-range rivals.

J.C. Penney's (NYSE:JCP) comps dropped 7.4% in its first quarter, yet it was going up against a fairly tough comparable. In Q1 last year the company posted a 2.2% comp store increase.


Target's (NYSE:TGT) Q1 comps were down 0.7%. However, that's on top of a 4.3% comp store increase last year.
Perhaps it's the hardware section that is holding Sears back. The housing market has been in a tailspin for months now, and this has spilled over into other related sectors. The two giants of the hardware industry have seen a brutal decline in sales over the last year.

Lowe's (NYSE:LOW) saw its Q1 comps decline 8.4%. That's on top of a 6.3% decline in Q1 2007.


Home Depot's (NYSE:HD) Q1 comps declined 6.5%. That's on top of a 7.6% decline in Q1 2007.

[bulrun100]

Monday, June 2, 2008
Berkowitz Buys Sears Call Options

Kudos to Concentrated Value for the pickup

Bruce Berkowitz of the Fairholme Capital picked up call options on Sears Holdings (SHLD) shares. He hold options on 354,000 shares having a current value of $28.3 million.

The options are at the $80 strike price and if exercised would increase Berkowitz's position by 39%.

The options were purchased between the Feb. and the May filings

[bulrun100]

If one looks at the history of Berkshire one also sees dramatic price drops. In 1973-74 the stock dropped from $90 to $40 a share. After the '87 stock crash it fell from $4,000 to $3,000. In 1990-91 it fell from $8,900 to $5,500 and from mid-1998 to 2000 the stock slid from $80,000 to $40,800. A drop in the share price of the has very little to do with the ability of either Buffett or Lampert to do what they so best. As a matter of fact at the turn of the century, Buffett was deluged with doubters who said he was "out of touch" and did not understand the "new paradigm" of business. I think we all know how that turned out. Todd Sullivan's - ValuePlays

[bulrun100]

MSF=123 MIGHT WANNA READ UP!

[bulrun100]

FROM 1999-2000 WSJ-BARRON'S
What's Wrong, Warren?
By Andrew Bary
Word Count: 1,476 | Companies Featured in This Article: Berkshire Hathaway, Berkshire's Class A, Coca-Cola, Gillette, American Express, Yahoo, Microsoft, Washington Post, Class B shares
A fter more than 30 years of unrivaled investment success, Warren Buffett may be losing his magic touch.

Shares in Buffett's Berkshire Hathaway are set to experience their first annual decline since 1990 and their second-worst year of performance, relative to the Standard & Poor's 500 Index, since Buffett took control of what had been a struggling New England textile maker in 1965.

At around $54,000 a share, Berkshire's Class A stock is off 23% in 1999, against an 18% return for the S&P 500 (including dividends). Berkshire has been hurt this year by weak operating results at its core ...

[bulrun100]

Concentrated Value has a thought provoking post in which he points out "As of May 23, 2008, Sears Holdings has 132,013,524 outstanding common shares. ESL Investments currently owns 65,639,184 shares giving the fund a 49.7215% ownership stake in SHLD. Notice how SHLD buybacks have significantly slowed as ESL closed in on the 50% ownership stake. Is Lampert timing the buybacks to coincide with a larger event?

Directors & Executive Officers as a group (19 persons) own 55.3% of Sears Holdings. The Tisch family alone owns 4,219,101 shares.

Eddie Lampert’s stake in Auto Nation is 40%. His fund has been aggressively buying shares in 2008. Will Lampert declare a 50% ownership stake in SHLD and AN at the same time?

[..........]

Lampert may be a great investor, but he is no manager/ceo. Anyone read the article in Conde Naste Portfolio? He's micromanaging SHLD right out of business.

[bulrun100]

As much as I think everyone wants to bash-short this stock I agree Eddie maybe over managing things.he needs to losen the purse strings and let the retail people do the job.Its still a buy on valuation alone which really never could be said before!