Incredible move today with no news. The stock has multiple insider buys in May. And, one notable buy by Bruce Berkowitz to add to his position. Here is the rub: Earnings in the past quarters have steadily shown declining losses, but the stock tends to sell off after earnings. I think a posting of 0.00 earnings losses will produce a lot of convexity to the upside. $41 SL-$48 TP. That's my pump for the day.
Does anyone shop there anymore? Their stores are so depressing, its like walking into 1978 when I go there, the last time I was there I was looking to buy socks, I saw the sale they ALWAYS have, buy one get one 50% off, but the thing was it was they were more expensive then the price I had originally seen at target, so I went to one of the workers to see if they could price match the product, long story short they couldnt, this was about 4 months ago, I forgot the reason why they wouldn't price match it but anyway their days as a retailer are almost done, they have had so much time to figure it out and make changes yet they are still failing, the kmart merger is also suffering, no one can stand up to the likes of Target and stores like Kohls....also no one under the age of 40 shops at sears and as years go on those people who grew up with sears catalogs are not going to be around, sears has failed to leave a lasting impression and thats why they will no longer be around...
There's a lot of press pieces about the fundamental outlook for Sears and plans to unlock value via it's real estate holdings which have been depreciated beyond recognition in it's balance sheet. Whether Lampert will revive the marketing machine is another thing. That isn't even his expertise. He is doing what he knows. Reshuffling the balance sheet to unlock value. JCP is the marketing reorg story. This company is obviously saddled with a ton of debt. Hopefully there will be positive earnings and real cash flow growth at which point this company won't have to be priced for bankruptcy. I think the market already recognized that prospect from the bottom made in Jan. We are waiting for that confirmation.
I think each year that passes by, Sears real estate becomes less and less valuable as anchor stores are losing ground to the Amazon.
I also remember 10 years ago, when KMRT merged with Sears: the bull thesis was "Sears will shed it's retail business and becomes Lampert's Berkshire Hathaway." I was naïve enough to believe that and I bought stock.
Amazon and Sears are 2 juxtaposed merchandising models that have equally vehement criticism. Maybe I am getting old (Gen X), but a salesperson is the first person I want to talk to when faced with a technical product ie. appliances, trading front-ends. Google along with forums has proven to be a time vortex. Berkshire works because the insurance industry provides stable cash flows to give Buffett a ton of capital budgeting leeway. Every Corp Fin trained guy knows this. ; ) I think there is a Canadian version of Buffett.
I really thought that good news was forthcoming. Earnings delays should have been a giveaway. Reversed my position. Not holding through earnings, though. "The retailer is the target of a shareholder class action lawsuit, which alleges that recently announced store sales were arranged to benefit CEO Eddie Lampert and that they would strip the retailer of its few remaining valuable assets." Source: CNBC- Yes. I read CNBC occassionally. They probably read us, too. It would be shocking to see this bounce off the 50MA again.
From our venerable newspaper: http://www.chicagotribune.com/business/breaking/ct-sears-0602-biz-20150601-story.html The closing is at the end of the month. So on the other hand, they won't be releasing material data that could derail the sale. I'm not sure. The buyer is also Lampert.