Cramer: Media Wrong on Eddie Lampert
01/28/08 - 02:49 PM EST
Jim Cramer
Plus, his buyback has actually reduced the float significantly; no buybacks countering management options -- or Lampert's stock -- but a real buyback that I love to see. If Lampert gets it right, or if the economy improves, this stock will pop harder than any other retailer because of this float shrinkage. Even though it is the nation's third-largest retailer, it is basically now not a large-cap company. Let's call that the third lie about this company and Lampert's work.
Oh, and I am not even including the buyback of the paper that wrote the most recent hit job, The New York Times, where most of the stock was bought back in the $30s and now it is $14. The company bought so much stock back that the buyback amount exceeds the worth of the company. Nor am I including the amazingly poor buybacks of so many financials, many of which are now issuing more stock much lower than where they bought it back. Don't read much about that, either. Lie No. 4: If Eddie had put a huge amount of money in his stores, it would have mattered a great deal to the business. I don't know, a lot of the other stores I follow have put in a huge amount of money and it hasn't helped much at all. There is no sign that it would have mattered. More important, Lampert has simply demanded a return on his investment. The other guys haven't had much if at all for the money they have thrown at their stores. Why is that not considered reckless? Lampert's returned capital to his shareholders instead and over a three-year period, that's been very right. Why not look at that time period? Finally, there are now charges that Lampert's partners in ESL Investments are now unhappy, hinting that they might leave. First, I know all of the large partners, and I don't know a soul who is unhappy with Lampert's performance, which is well above the S&P 500 -- 1000 basis points to be exact -- during this current lockup.
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