Author Topic: SHLD - Sears  (Read 934749 times)

constructive

  • Hero Member
  • *****
  • Posts: 746
  • Country: us
Re: SHLD - Sears
« Reply #1600 on: August 22, 2013, 03:38:06 PM »
If you look at the stock price, you can see that the equity never lost its value through the bankrupcty process (similar to GGP in recent years).

"In its filing with the bankruptcy court, Alexander's listed assets of $183.7 million and liabilities of $95.7 million. Bankruptcy experts say the value of Alexander's real estate insures that its banks, suppliers and even its shareholders are likely to recoup their losses in the long run."

GGP had $29.2B tangible assets and $27.3B liabilities when they entered bankruptcy.

Compare Sears with $16.0B tangible assets and $16.5B liabilities.
« Last Edit: August 22, 2013, 04:00:41 PM by constructive »

blainehodder

  • Full Member
  • ***
  • Posts: 227
  • Country: ca
Re: SHLD - Sears
« Reply #1601 on: August 22, 2013, 03:44:03 PM »
The Kim Kardashian Kollection?  I guess Sears neededsomething to combat the JCP tea kettle?
[/quote

I'm seriously surprised that people on this board didn't know that Sears exclusively sells that Kardashian Kolleciton.  This was big news and is a big reason why apparel sales have increased the last 8 quarters. 

People can make fun of it as much as they want, but I guarantee the awareness of Kim Kardashian vs. Ted Williams to the under 21 female crowd (future core U.S. spenders) is probably 100 to 1.   I like Ted Williams as much as the next guy, but apparel shoppers don't want to be like him.  Women do think the Kardashians have style.  It'd be best to accept that. 

It was a poor joke. First the JCP Hitler kettle.

  ... Now sears comes out with the KKK line. 
« Last Edit: August 22, 2013, 03:53:26 PM by blainehodder »

wellmont

  • Hero Member
  • *****
  • Posts: 1988
  • Country: us
Re: SHLD - Sears
« Reply #1602 on: August 22, 2013, 03:54:18 PM »
The Kim Kardashian Kollection?  I guess Sears needed something to combat the JCP tea kettle?

I'm seriously surprised that people on this board didn't know that Sears exclusively sells that Kardashian Kolleciton.  This was big news and is a big reason why apparel sales have increased the last 8 quarters. 

People can make fun of it as much as they want, but I guarantee the awareness of Kim Kardashian vs. Ted Williams to the under 21 female crowd (future core U.S. spenders) is probably 100 to 1.   I like Ted Williams as much as the next guy, but apparel shoppers don't want to be like him.  Women do think the Kardashians have style.  It'd be best to accept that.

so you are saying that their apparel operation is tied to a temporary fad? great.
2000 zero zero party over it's out of time...follow me @well_mont.

heth247

  • Full Member
  • ***
  • Posts: 246
Re: SHLD - Sears
« Reply #1603 on: August 22, 2013, 03:58:14 PM »
"In its filing with the bankruptcy court, Alexander's listed assets of $183.7 million and liabilities of $95.7 million. Bankruptcy experts say the value of Alexander's real estate insures that its banks, suppliers and even its shareholders are likely to recoup their losses in the long run."

Compare Sears with $19.3B in assets ($16.0B tangible) and $16.5B in liabilities.

But the question is if the 16b asset and 16.5b liability really reflects the reality? As Mussleman and Fcharlie pointed out in today's filing, they sold stores for $287mm which was carried for $47mm on book, and the liability has decreased $700mm due to interest rate rise. 


premfan

  • Sr. Member
  • ****
  • Posts: 282
Re: SHLD - Sears
« Reply #1604 on: August 22, 2013, 04:04:32 PM »
Sitting back with my popcorn and green tea. Great case study on why turnarounds rarely turn or if they do turn its hard to know when. For long time believers of eddie why not just invest when the story is simple and told?.  I have no skin in the game. Intently watching to add new insights to my mental model list. Good luck to all the speculators.

The reason I'm invested and not selling my stake and then getting back in when it's "simple and told" is because there will always be some worry with any stock and there will always be doubt.  Also, there is no guarantee that further bad operating numbers will result in lower share prices.  We could be trading at $50 or $60 by the time next earnings come out on nothing but the short-term emotions of traders (voting machine vs weighing machine).  What I'm saying is that I believe SHLD is dirt cheap.  Could it go to $30?  Sure, but it's cheap at $40 and $50, too, so why not buy and take away the element of trying to time the market?

I also think there are a handful of potential catalysts that could cause a gap up when the market is closed.

REIT:
http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/shld-sears/40/
If they are moving to asset light, there are going to be more REIT monetazation(s), hq, distribution center, stores.  The argument that there isn't a market for mall/big box assets is unfounded, you have SPG selling at +20x FFO.  I was recently caught in a short that gapped over night by 30% because of a reit conversion, on my list of risks for this short, I had never considered that.  The Company is PENN, we're talking about a single entity, special special purpose REIT conversion.  The market is hungry for yield and they really don't care what kind of asset it is.

Short Squeeze:
http://www.oldwestim.com/files/media/Download%20this%20site/Commentaries%20and%20Investor%20Letters%202013.02.04.pdf
We have recently stopped lending out our shares because we are increasingly concerned that there could be a fail-to-deliver problem if there happens to be a short squeeze based on the market better recognizing the company’s underlying value as a
result of real estate deals, brand distribution deals, better than expected operating performance (imagine margins rising as sales fall), or just continued buybacks with cash taken from operations or runoff activities. When you strip out the shares owned by Eddie Lampert/ESL, boardmemember/ESL investor Tommy Tisch, and long-term shareholder Bruce Berkowitz at Fairholme, only 20% of the total shares outstanding remain publicly traded, and 50% of that ever-shrinking float is reported short. To repeat, only 20% of total shares outstanding remain publicly traded, 50% of that float is reported short


It's actually closer to 61% of the float now conservatively.  That's only counting Lampert, Berkowitz, Tisch (not counting Horizon, Baker Street, Chou or any institutions).

Lampert announces he's closing ESL and focusing solely on SHLD:
But your right, if he did become the portfolio manager at Sears Holdings I would be more or less buying hand over fist.

I don't think texual would be the only one.

Deal with Amazon:
http://www.insidermonkey.com/blog/amazon-com-inc-amzn-and-sears-holdings-corp-shld-strange-bedfellows-or-a-match-made-in-heaven-185421/

What does Sears have that could interest Amazon? Bricks.
Amazon.com, Inc. (NASDAQ:AMZN) is currently a significant tenant for datacenter REIT Digital Realty Trust, Inc. (NYSE:DLR), leasing 448,895 square feet in six properties. Why is this important?

Sears Holdings Corp (NASDAQ:SHLD) is in the early rounds of evaluating and extracting the value locked in its vast legacy real estate holdings. It is in the middle rounds of a difficult fight to create a profitable, customer focused retail operation. Sears is currently valued around $5 billion. Amazon is currently valued around $125 billion. I am not currently advocating or trying to make a case for Amazon to acquire Sears. However, I do believe there is a compelling case to be made that Sears is significantly undervalued at the present time. Sears' vast portfolio of real estate certainly contains pins in the map that could be ideal for Amazon.com, Inc. (NASDAQ:AMZN)'s expansion plans.

Amazon CEO Jeff Bezos recently announced the company’s entry into the grocery business. This new business initiative will certainly require additional facilities and boots on the ground.


What's stopping Amazon from leasing a comparable amount of space to satisfy its desire to have stores, or to really launch their grocery business, etc.?  See what just 40,000 sq ft deal with Forever 21 did to the stock price below...

Larger deal with Whole Foods, Forever 21, etc: 
That 40,000 sq ft deal with Forever 21 in the past caused the stock to jump 5%.  5% on a pittance of the square footage owned by Sears.  What would a 200,000 square foot or 400,000 square foot deal do to the stock price?


Sell Lands End or other brands:
It appears that Lampert could sell Lands End tomorrow and either dividend all of the cash to shareholders, or use it to buy back stock.  It appears he could do the same with most of the real estate as well as the brands. 

Would you be just a little scared as a short if Lampert had an additional $1B-$2B in his pocket, especially given his track record of buybacks?

In my opinion any of these events would cause a strong surge in the stock price, and if that takes place after-hours or when the market is closed, we'd miss that huge gap.  Even if it takes place during the day there are not many shares to be traded right now... and you can bet the shorts would be putting in market orders to cover making it that much harder to get in at a decent price.

If one is worried about the timing of it why not just sell puts to get some premium while you wait?  It seems a bit naive to me to think we can predict when a certain event might occur (and predicting that nothing will happen and the stock will go down or stay flat, is the same as predicting that something will happen).  I don't know of any true value investors that have made a consistent living timing their positions.

Its not timing a position. Its labeling a position as :

1.) Long term core holding
2.) spec
3.) trade

You can rationalize it anyway you want. But this is totally a spec play currently not a investment. No one in their right mind can  predict the earnings yield 2-3 years out.  What is confusing is so many people have a insane strong conviction on a spec play.

ScottHall

  • Full Member
  • ***
  • Posts: 154
  • Country: 00
Re: SHLD - Sears
« Reply #1605 on: August 22, 2013, 04:11:27 PM »
  What is confusing is so many people have a insane strong conviction on a spec play.

+1
You can follow me on Twitter @TMFRosetint

premfan

  • Sr. Member
  • ****
  • Posts: 282
Re: SHLD - Sears
« Reply #1606 on: August 22, 2013, 04:19:37 PM »
You spec on things when the street and overall sentiment thinks bankruptcy when the reality is not so. This is based on your personal checklist. There still is a lot of joy and positive talk about sears. I will only invest ( spec) when shit really hits the fan ( if it ever does).  I need total doom and gloom and most importantly I need to be unsure and a bit fearful on making the bet. Having confidence and conviction while doing a spec play is death. I need to be scared and a bit fearful then I know its time to spec.

premfan

  • Sr. Member
  • ****
  • Posts: 282
Re: SHLD - Sears
« Reply #1607 on: August 22, 2013, 04:23:52 PM »
If you look at the stock price, you can see that the equity never lost its value through the bankrupcty process (similar to GGP in recent years).

"In its filing with the bankruptcy court, Alexander's listed assets of $183.7 million and liabilities of $95.7 million. Bankruptcy experts say the value of Alexander's real estate insures that its banks, suppliers and even its shareholders are likely to recoup their losses in the long run."

GGP had $29.2B tangible assets and $27.3B liabilities when they entered bankruptcy.

Compare Sears with $16.0B tangible assets and $16.5B liabilities.

Thanks for info. Very good!

heth247

  • Full Member
  • ***
  • Posts: 246
Re: SHLD - Sears
« Reply #1608 on: August 22, 2013, 04:24:40 PM »
You spec on things when the street and overall sentiment thinks bankruptcy when the reality is not so. This is based on your personal checklist. There still is a lot of joy and positive talk about sears. I will only invest ( spec) when shit really hits the fan ( if it ever does).  I need total doom and gloom and most importantly I need to be unsure and a bit fearful on making the bet. Having confidence and conviction while doing a spec play is death. I need to be scared and a bit fearful then I know its time to spec.

I thought the speculation here is about the timeline -- when Eddie will either turnaround the retail or unlock the asset value -- not really about if SHLD will go BK...

premfan

  • Sr. Member
  • ****
  • Posts: 282
Re: SHLD - Sears
« Reply #1609 on: August 22, 2013, 04:32:48 PM »
You spec on things when the street and overall sentiment thinks bankruptcy when the reality is not so. This is based on your personal checklist. There still is a lot of joy and positive talk about sears. I will only invest ( spec) when shit really hits the fan ( if it ever does).  I need total doom and gloom and most importantly I need to be unsure and a bit fearful on making the bet. Having confidence and conviction while doing a spec play is death. I need to be scared and a bit fearful then I know its time to spec.

I thought the speculation here is about the timeline -- when Eddie will either turnaround the retail or unlock the asset value -- not really about if SHLD will go BK...

Whenever comes first. Who knows. If it turns then invest for the long term. If it  continues to struggle sooner or later people would spec that its going BK. The sentiment would totally change. No one on this board would be so joyful and have all this conviction. Look for the sentiment change and mostly important make sure your checklist says invest. Sears is a binary situation but no one knows what and when all this will manifest.