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If retail stalwart
Sears Holdings(SHLD - Get Report) seems to continually pop up on searches for attractive short squeeze opportunities -- perhaps it's because the company is just that. Shares of Sears are down just 10% on the year following a rally last month that sent shares 13% higher. Now, with a short ratio holding at 13.9, this company could finally be getting closer to a pop.
From the costly and questionable integration of Kmart to a broad-based pullback in retail spending, Sears has faced a number of major challenges in recent years. And while the company is still unable to deliver consistency to investors, the firm is moving in the right direction by finally leveraging its powerful portfolio of exclusive brands across its sales channels. With consumer sentiment pushing higher toward the end of 2010 (and bringing retail spending along with it), expect Sears to be one of the biggest beneficiaries of the return to "normalcy."
Legg Mason Value Fund (LMVTX) is one of Sears' biggest mutual fund holders. The fund's other stakes include
Bruce Berkowitz' Fairholme Capital also likes the stock, which makes up 9.4% of his total portfolio, as does
Tiger Global Management, which initiated a new position in Sears in the most recent period.
To see this week's trades in action, check out the
New Year's Short Squeezes portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.