Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
The wild ride at the end of 2011 and thus far in 2012 for Sears Holdings (SHLD) is one which can teach us a lot of lessons – I am just trying to process and sort them out myself! At the turn of the year there were worries of a ‘liquidity event’ (i.e. think potential bankruptcy). I had read some talk of withholding of financing which is never a good sign. Today’s company results were gosh awful. Yet you have a near double in the stock in 2012! Granted it’s only back to where it was around Thanksgiving but for anyone who did not get caught in that portion of the vortex, there was money to be made in those hills. Somehow it’s come all the way back to its 200 day moving average.
More from WSJ’s Marketbeat
- Sears Holdings posted a huge fourth-quarter loss this morning and announced ambitious plans to spin off businesses and reduce headcount in order to boost liquidity.
- Chairman Edward Lampert didn’t beat around the bush describing Sears’ troubles last year. “Our poor financial results in 2011, culminating in a very poor fourth quarter, underscore the need to accelerate the transformation of Sears,” Mr. Lampert says in his shareholder letter.
- Sears’ situation looks like the ultimate kitchen-sink scenario. Mr. Lampert is laying out the company’s transformation plans and is hoping the worst is over. “While some may claim that these results are a continuation of a trend, I believe that they are an anomaly after three years of relatively stable EBITDA performance,” Lampert says in the letter.
- Sears plans to spin off its outlet, hometown and hardware-store businesses, consisting of about 1,250 locations. The retailer also announced it will sell 11 stores to General Growth Properties for $270 million.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
