It is time to speak the truth about Sears Holdings (SHLD). All of the disaster scenarios did not come true. All of the stuff on TV and in the press about what was supposed to happen -- a true debacle -- didn't happen.
In fact, the opposite.
Now, I want you to put aside a couple of negatives: Eddie Lampert, a friend, who runs the company, should not have bought stock all the way up. That was a mistake. He admits it.
Put aside the fact that the stores may not be what you want to shop at. I have a nice one, but it is often empty. Forget for a moment that Lampert "missed the window" of selling lots of real estate at higher prices.But let's look at what is happening here. Sears made money in the fourth quarter. In fact, it made pretty much what it made last year. HOW MANY RETAILERS CAN CLAIM THAT? Second, the debt that everyone was so worried about? Read the release: "We repaid all borrowings under our revolving credit facility as working capital needs declined as expected." That's what Eddie expected. It is not what the bears expected. Third, sure the comps are down. But so are everyone else's. Yes, sales were boosted by "layaway" plans. But that's like a credit card, for heaven's sake. We accept the notion of credit cards, don't we? Comps may be down, but so is inventory. Impressively, actually. Fourth, all of this was done before the rationalization of the store base. It took a while -- longer than I would like -- but Lampert is now ready to start closing underperforming stores. What would the comp stores look like without the bad ones? I bet substantially higher. Same with the overlap between Kmart and Sears.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV