Not only has Lampert been personally financing Sears’ slow and painful decline, but he has also been profiting from it as well. His hedge fun bought quite a bit of SHLD real estate to create a real estate investment trust called Seritage Growth Properties (NYSE:SRG) two years ago. Lambert also owns nearly 50% of SHLD’s secured debt, and together with Bruce Berkowitz, Lampert owns almost 80% of Sears Holdings Corp.
That kind of CEO tie-up is a good reason to steer clear of Sears stock, because it suggests that Lampert’s decisions, especially regarding a bankruptcy filing, are likely to be more in his own interests than they are in common stock holders’ interests.
Bottom Line on Sears Stock
Sears stock is in a precarious position, and the firm looks unlikely to make a substantial recovery any time soon. If you are unfortunate enough to be holding SHLD in your portfolio, it may be time to let go.
Sears stock is probably heading even lower in the months ahead, and could even be filing for bankruptcy within the next year. With the Craftsman sale behind it, Sears’ earnings reports are unlikely to wow investors with any further cost-cutting measures, so the chances of another lift are very slim.
As of this writing, Laura Hoy did not hold a position in any of the aforementioned securities.