Ockham Research

Sears Surprises Everyone

Thanks for your thoughts Stone Fox. This is by no means a complete research report, it is a blog giving Ockham's take on some of the current market headlines.

I understand you are liking what you see on SHLD's balance sheet. It is obvious that you have a different outlook than I on the value of real estate right now. Have you looked at GGP or SGP lately? There is an excess of retail space according to those two balance sheets. You make it sound like Sears has some of the most attractive real estate out there (according to your other comment about Sears today), which is not what I have known to be true.

We could argue the value of commercial real estate until we are blue in the face but that has not changed from 24 hours ago. What did change was a earnings surprise (see fcharlie's point). I stand by the fact that it is not wise to invest in a stock that gapped up close to 20% on falling sales. If you were long before today then congratulation, and best of luck in the future.

Have a great Memorial Day, all!


On May 22 03:49 PM Stone Fox Capital wrote:

> Why would you value SHLD as a pure retailer? You just think we should
> ignore the balance sheet and assets? Also, its not accurate to just
> compare them to Wal-Mart. KMart, yes, but Sears is much more like
> a HD that has been struggling.
>
> Still any research that talks about price to sales is pretty worthless.
> Come on guys, do some dirty work. Don't just fire off reports based
> on standard ratios. Thats how you had a stock as Fairly Valued that
> was up 20% after hours last night.