This column was originally published on RealMoney on April 25 at 12:53 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.
It's been a long time since I have written this: You have to buy
. I write this because of one simple line buried in the
conference call: "Sales at Sears' Kenmore business showed marked improvement and posted improved year-over-year results."
Here's the theory: People know from the last quarter that Kmart now has begun a successful turnaround. But Sears' numbers have been down double digits and the bears have kept a relentless focus on that fact. They have drilled it into everyone's heads that
have taken gigantic share and Sears is a dead store.
We now know that Whirlpool, which private-labels Kenmore, says otherwise. This change is gigantic. If Sears makes a comeback, and Eddie Lampert keeps buying back stock, which he has, we have a chance for a major stock comeuppance. I think that Sears could easily take out its old high on the strength of any Sears turnaround, any at all, and I think from Whirlpool that we are getting one.
I have stayed away from talking up this stock since I bought it for less than $120 before the quarter.
I now have ammo enough to go back to the well and say that we have a turnaround in the making, even before one bit of real estate is disposed of. I know that Eddie said it wasn't a real estate story, and it isn't; it is a profits story. But I also know that the business is over-stored and there are a ton of companies that need the space Eddie has to make their numbers in the out years.
have to do to go higher? The company is almost debt-free. Now, it
true that management issued stock for debt and the stock is free to trade this week, but still, this is the cheapest infrastructure play there is, and it seems a little unreasonable that it can stay that way. ... I used to buy
Johnson & Johnson
weak dollar, but that company's been very challenged, too.
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At the time of publication, Cramer was long Sears Holdings and Foster Wheeler.
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