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    • Thu Jan 17th 11:32 AM | Rating: 0 0
      Commented on:
      Second-Guessing a Sears Position
      I think SHLD still has a liquidation value at 120-140 per share (worst case scenario). Liquidate the inventory, sell off the brands, turn the real estate into a REIT. Do it over 3 years or so . . . To sell now would be silly.

      Everyone says that the only way to make real money in the market is to buy low and sell high. You only get opportunities to buy low on bad news . . . that's just life. Human nature is to feel pain of loss more than joy in gain.

      I bought a little SHLD at 180. I bought a little more at 140. I bought a lot at 100. And I'll load up even more if it goes below 80. 60 would be a dream. SHLD is rich in assets that aren't being put to their best use. At some point Lampert will either turn it around, or put those assets into the hands of people (via auction sales, probably) that will put them to best use.

      It will take time . . .

      SHLD is a minimum 5 year hold from right now.

      That's my take . . .
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    • Wed Dec 5th 14:56 PM | Rating: 0 0
      Commented on:
      What's Wrong with Eddie Lampert's Strategy at Sears?
      Then Bill Ackman must be an idiot, too. And Berkowitz.

      The stock got ahead of itself, but there's a lot of value. Here's my take.

      In the earnings make up of Sears, there are profitable and unprofitable stores. Lampert has been pricing (gross margins) for profitability. I think he's stress testing the stores. The profitable stores are going to stay, the unprofitable ones are going to go.

      I think he may have understood that in doing this, the share price would drop. May have even done it on purpose to get more shares at a price he wanted. He certainly has been gobbling them up.

      I think you pick up restoration hardware, put it into your profitable stores, sell off your unprofitable stores. you're now getting cash flow from real estate sales, and you've gotten rid of the drag on earnings from the unprofitable stores. so you're spitting off cash, boosting your ROIC and EVA and transforming your unprofitable stores which are sitting on valuable locations into cash.

      i see so much value in sears. people might be getting impatient with him. but there's value there and he's not going to sit around forever without unlocking it.

      i think he's been stress testing these stores of ROIC potential, and he'll keep what's "good", and divest what's "bad" while upscaling the Sears experience. With Land's End, Restoration Hardware, Kenmore, and Craftsman . . . heck, that's a formidable lineup.
      View article »
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