Sears Holdings Corp (SHLD) Shares Fall as Lampert’s Firm Cuts Stake

0

Shares of Sears Holdings Corp. (SHLD) fell 7.7% yesterday after it revealed that Edward S. Lampert’s firm, ESL Partners has reduced its stake in the company. However, Lampert did not distribute his personal stake in the financially stressed retail company.

Play Quizzes 4

Lampert declared his hedge fund company’s disbursement of 7.4 million shares of Sears Holdings to investors who wanted to withdraw their money from his firm. The move has brought down his firm’s stake in Sears Holdings to 48.4% on Dec 2, 2013 from 55.4% as of Mar 19, 2013. Despite this, Lampert, who is the chief executive and chairman of Sears Holdings, remains the largest shareholder of the retail company.

Sears Holdings has long been grappling with soft top and bottom lines performance. The company’s restructuring initiatives have not been successful and Sears Holdings is constantly lagging its peers Target Corporation (TGT), Dollar Tree Inc. (DLTR) and Macy’s Inc. (M).

Morningstar Investment Conference: Fund Manager Highlights Personalized Medicine, Energy Security

Clint Carlson Far ViewHedge fund managers go about finding investment ideas in a variety of different ways. Some target stocks with low multiples, while others look for growth names, and still others combine growth and value when looking for ideas. Some active fund managers use themes to look for ideas, and Owen Fitzpatrick of Aristotle Atlantic Partners is Read More

While Sears Holdings appeared to be returning to the growth trajectory when it posted improved year-over-year bottom-line results for all the quarters of fiscal 2012, the results of the first three quarters of fiscal 2013 have dampened investor sentiment. During all these three quarters, the company’s loss per share has widened substantially on a year-over-year basis.

However, in an attempt to boost its financial performance, this Zacks Rank #4 (Sell) company has undertaken a number of measures, such as reducing investment in sections of the company that no longer contribute significantly to its growth. Moreover, Sears Holdings intends to lower the number of Kmart and Sears full-line stores to slash costs.

Last month, the company’s unit Sears Canada Inc. successfully terminated leases at 5 stores – 4 in Ontario and 1 in British Columbia – as part of its turnaround strategies to enhance operations. These outlets had 965 staff in total.

Moreover, as part of Sears Holdings’ transformation plans announced in October, the company has decided to spin off its Lands’ End and Sears Auto Center businesses. The sale will expectedly provide the company additional liquidity and facilitate better focus on its core business.

At present, Sears Holdings is concentrating on cost containment, inventory management and implementation of merchandise initiatives to inflate margins. We commend the company’s strategy of capitalizing on opportunities, while augmenting performance through its revamped organizational structure and new operating model. All these measures will expectedly improve its top and bottom lines, going forward.

DOLLAR TREE INC (DLTR): Free Stock Analysis Report

MACYS INC (M): Free Stock Analysis Report

SEARS HLDG CP (SHLD): Free Stock Analysis Report

TARGET CORP (TGT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Updated on

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were audited and attested by Baker Tilly, an independent accounting firm.
Previous article Book Review: Retirement GPS
Next article General Motors Sells Stake In Ally Financial, Formerly GMAC

No posts to display