123

Lampert's Patience Is Rewarded as Sears Holdings Buys More Sears Canada Shares

Todd

30K shares * $18 per share is less than $600,000.

This is an immaterial move. *Beautiful*

Can you please get your nose out of Lampert's a**?

Ackman's Sears Sale: An Expression of His Activism

I would take a position sort of in between fcharlie and searsdog.

You two seem to think there are only 1 scenario for Sears-liquidation. That Sears is essentially a balance sheet, not a business.

The problem with this thinking, in my opinion, is that Eddie has run this company like a business, not like a balance sheet, and not like a holding company. And it appears, to me, that he will continue to do so.

So he will continue to try to turn the inventory 4 times a year like the stores have done in the past, at a positive but modest margin, perhaps a bit or somewhat lower than in the past. The problem is that there may well be this unlocked value in the real estate, and in some of the current assets, but Eddie appears to be reluctant to sell it off. It seems almost like he's bought an empire, and is willing to sit on his a** on it.

I mean, if you're sitting on value, why sit on it? Every day that you wait, that is cash tied up in those assets. So the problem with Sears is that it's tough to time the cash flows resulting from any asset sales, because if they come in 20 years or 10 years or 50 years or not at all, you're left with just the cash generated by the business, and that is roughly 1-1.5 billion in good times, and less than that in bad times. Even is Sears makes $1B this year in free cash flow, which probably is not very likely, investors can get similar yields elsewhere now, in companies less levered than Sears (people seem to be ignoring the "only" $4.4B in pension liabilities completely), so I really do not see the value in this one.

This changes, like I said, if Eddie starts throwing off incremental cash with asset sales, but that hasn't been the case.

Numbers Check on Sears Holdings - It's Cheap

To Will Jul 17 09:33 AM

"If you observe the comments following any Long-Sears article, it's very interesting. The longs typically discuss fundementals, balance sheets, assets vs. liabilities, and cash flow. The shorts bring up Jim Cramer..."

Not only can you not spell "fundamentals," you also seem to fail to realize that fundamentals are mushy and in the wrong hands, are just as dangerous, misleading, and meaningless as a Buffett or Cramer quotation or a parking lot survey, and can be manipulated with not great difficulty.

Fundamentals are statistical evidence (sometimes accurate/truthful, sometimes not). Nothing more.

For example, I think Sears will make $0.5B to $-0.5B of cash flow this year. The guy who wrote this thinks it will make $2.3B (not a chance in hell). Who is right and why?

Thanks, Will, because you're the guy with all the answers who has a job to boot.

AutoNation, Sears, and Autozone Getting Closer Together

Todd,

Do you ever respond to reader comments? Or are you content with posting propaganda-laden fluff pieces?

Is Lampert Making the Grade at Sears Holdings?

Why did you roll your 401-K into it if "all the good managers are gone" etc etc

Seared

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

Seared

this isnt warren and this isnt berkshire

Seared

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

Seared

"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.

Sears' Nifty Purchase: Footstar Footwear

Does anyone know how people are coming up w 45B valuations for SHLD. Whitney Tilson, for ex, was on CNBC claiming that he is buying dollars for 30c when buying SHLD for $100.

The retail operation is pretty visible at 1.5B of FCF, but how are people coming up w these real estate/brand valuations, does anyone know? Todd, you have been hyping this stock for a long time, but beyond the Lampert factor what does this company have going for it?

Also Lampert is the man but as of yet he has not been able to deploy capital to grow the business. If the business is dying and all he can do is buyback stock or payback debt, this is not a very valuable operating business and probably isnt worth more than the 10X FCF its valued at right now. And you either run the business or sell the assets, you can't do both, and Lampert has been reluctant to do the latter, even for underperforming stores it seems.

Its just a bit frustrating bc all these value guys Pabrai, Tilson, not to mention Lampert love this co but it seems like a crap company.

You look at Penney for example and it is making about the same amount of money on about 20B of sales. Sears is just a real crap company, horribly run, the stores are in shambles, the merchandise hanging on the racks looks like it's already been worn. You'd be crazy to doubt Lampert but have you been in a Sears store? You would think they could at least pay someone to tidy up the racks and not have it look like a garage sale. I don't know why anyone shops there, the clothes are overpriced and the quality is just terrible. Lampert is reorganizing, etc, etc, but why do you need to reorganize to implement such fundamental changes in the stores?

SHLD is like a relic, 3000 stores back from the 60s when Americans had no choice at all, and shopped Sears bc there was no alternative. Now you look, almost any store is better than Sears.

As to the Kraftsman, Kenmore whatever-what is the big deal? A toolset is a toolset, a fridge is a fridge, whether its called Kenmore or Whirlpool or Maytag, I can get one in BBY, I can get one anywhere, I don't have to go to Sears because I need a Kenmore.