YTD Price Appreciation: 36%
Sears Holdings (SHLD) is still losing money hand over fist … just not as quickly as before. CEO Eddie Lampert has put Sears through so many changes it’s hard to keep track, but a quick recap includes closing down stores by the truckload, selling off its Orchard Supply Hardware (OSH) and Sears Hometown and Outlet Stores (SHOS) and renegotiating a big part of its leased store portfolio.
But Sears is not only selling underperforming stores; it also sold off four profitable stores recently just to raise cash. That’s a nice boost to the balance sheet, but turning real estate into cash won’t do much to increase foot traffic and sales. No wonder SHLD still lost just under $4 billion combined in its last two fiscal years.
So what’s driving the stock price improvement? Well, it could be that real estate value after all. An upbeat report from Baker Street Capital placed SHLD value at $92 to $169 per share (the high-end of the range is three times the current price of SHLD stock) primarily based on a property-by-property valuation. The only other possibility would be smaller losses — but that’s hardly a bullish thesis.
Frankly, I don’t see SHLD stock going anywhere but down in the long run. If ever pictures told a story, just take a look at these snapshots from Sears — and it’s not hard to understand why SHLD stock probably won’t keep climbing.