In a constant search for deals, you have to be watchful of a company that is down and out versus a company that is down for the count. As you've read in the previous posts, I have not been able to find very many beaten up companies and the economy continues to steadily improve. My favorite has been Lululemon (LULU) and I stuck with it through the rough patch. The good is they delivered great news during their last earnings announcement and rose over 10% after that announcement! Now we are on to the next potential candidate.
Sears Holding (SHLD)
Back in the day Sears was one of those places I remember going to for all of my needs. Then came the competition from Walmart, Target, and the INTERNET. Sears even bought Kmart (big blue) and that still has not turned this big company around. My quick assessment is Sears is big and burly and has not attracted me with lower prices or easy store locations to navigate to. So for me, they often lose out to Amazon, Target, and my local grocery store. Sears has been on my radar as a company that is definitely down and out. The latest news is now they will be borrowing money from their CEO and hedge fund manager Eddie Lampert. They will borrow roughly $400 Million dollars which is abnormal and smells a bit like desperation. I think other investors may agree with my assessment as Sears stock has fallen from somewhere in the $40 dollar range to $27!!!
Sears is not only down but likely knocked out for awhile. The one thing I will watch closely is the CEO. Why?... because smart people usually don't throw good money after bad. Eddie Lampert may be trying to save face by continuously trying to revive a sinking ship...OR he may just have one more trick up his sleeve.
URB Assessment:
I don't shop here, the prices still are the lowest, and the stores have not been remodeled in quite awhile. I am curious if it can get any worse so a VERY SMALL investment could be stored away for a rainy day. But I don't think this company is a hidden value waiting to be unleashed. More like a Boxer than needs a new trainer or recognized its time to retire.
