This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cramer's 'Mad Money' Recap: A Yardstick for Sears

Click here for an archive of Cramer's "Mad Money" recaps.

On Friday, Fortress Investment Group becomes the first publicly traded hedge fund in America, but the big beneficiary from that offering will be Sears Holdings (SHLD), Jim Cramer told viewers of his "Mad Money" TV show Thursday.

Sears, a stock Cramer owns for his Action Alerts PLUS charitable trust , is more than just a retailer -- it's an investment business, he said. And the "mastermind" behind Sears, Chairman Eddie Lampert, "is one of the best money managers in history," Cramer said.

Right now there are no publicly traded hedge funds in the U.S. marketplace so there's no way to measure how much the investment side of Sears' business is worth, Cramer explained. "There's no yardstick to measure it against."

Generally, if Wall Street doesn't have comparable stocks, investors will not buy the stock because they don't know what it is worth if they don't have any similar businesses with which to compare it, he explained.

Because people can't value Sears' investment business, they treat it like a retailer, Cramer continued. But now that Fortress is ready to come public , market players will be able to see what Fortress trades for and stick that multiple in the earnings Lampert generates at Sears, he said. Cramer believes that once Sears has a comparable, more people will invest in it.

"Fortress' multiple, which will probably be 17 times earnings, tells us what we should pay for Sears' investment business," he said.

When people compare Sears and Fortress, they'll see the former is cheap, Cramer added. On a conservative level, he believes Sears should be worth $237 a share. Sears closed at $180.81 Thursday.

Also, since the company could do a lot more to raise cash for Lampert to manage, Sears could have even better returns, Cramer said.

While some feel the Fortress yardstick could also be used with Goldman Sachs (GS), which Cramer also owns for Action Alerts PLUS, he said he can't go along with that because he feels Goldman Sachs is more than a hedge fund.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,918.16 +113.36 0.64%
S&P 500 2,073.65 +3.00 0.14%
NASDAQ 4,773.1120 +7.7320 0.16%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs