SHLDQ - Sears Holdings Corp

[ERICOPOLY]

Never say never I suppose.

 

Perhaps he'll manage money virtually for free via SHLD thus effectively losing the ESL fees.  A hedge fund manager that no longer wants to make money off of his partners' money is a rare breed.

 

 

[Grenville]

Grenville,

 

Bruce discussed Sears Holdings real estate portfolio (ie- the 80/20 rule) in the March 17, 2009 issue of Outstanding Investor Digest.  Here is the link

 

 

http://www.google.ca/url?sa=t&rct=j&q=march%2017%2C%202009%20and%20outstanding%20investor%20digest&source=web&cd=1&cad=rja&sqi=2&ved=0CC0QFjAA&url=http%3A%2F%2Fwww.grahamanddoddsville.net%2Fwordpress%2FFiles%2FGurus%2FBruce%2520Berkowitz%2FOID%2520-%2520Bruce%2520Berkowitz%2520-%25203-17-2009.pdf&ei=1A-8UK6JIYjE2gXdq4GAAw&usg=AFQjCNF7J04qOV9uWCTLCC695qDAjYnPVg

 

Thanks DrewDalton for the link!

[FCharlie]

I just noticed a new SEC filing for SHLD effective Nov 30, 2012.  From my reading ESL (Eddie's hedge funds) has wound up one of its partnerships and distributed 5.9m of SHLD to its limited partners.  It will be interesting to see if Eddie has taken his management fees in SHLD shares.  In January and July of this year ESL wound up two partnerships that it specifically set up for the Ziff brothers.  Eddie ended up with all those shares (about 6 to 7 million) either through fees or through purchases. 

 

SHLD may have been sold off last week in anticipation of the limited partners' shares hitting the market.

 

 

Eddie also distributed shares of AutoNation to partners.

 

At the end of the day, distributing shares shouldn't matter. Eddie himself hasn't sold. Bruce Berkowitz hasn't either. They are the reasons most of us are here.

 

The stock is down almost 40% in the past three weeks. Wow.

 

 

 

[bmichaud]

What are the odds of permanent loss by owning SHLD? With the kind of balance sheet, assets SHLD has - how can it go into bankruptcy?

 

I have been unable to come up with many scenarios where that can happen. Especially, at the holding company level - the odds of bankruptcy are extremely remote.

 

A large part of its sales/services are directly linked to the housing market. Yet, is has survived the worst crash in living memory in housing with a strong balance sheet. In fact, it has continued to contribute to its pension plan, paid down debt and bought a lot of shares through this period. i.e in a lot of ways the balancesheet is better today. Having survived the slow down alone insures that they will do well when consumer spending comes back and the housing market get better.

 

I do not think the management at SHLD has been as bad as most people claim. Look at Home Depot, Best Buy and other retailers like JCP over the last 4 years. SHLD's drop in sales is similar - could the real reason for it be the slow down in housing and lower consumer spending rather than the management. Something to consider.

 

It is also a play on commercial real estate with low cost real estate or low rents locked in.

 

SHLD's strong balancesheet allows EL to play the waiting game (similar to Watsa or Buffett):

- housing is already making a come back which should lead to higher sales, thus, cashflow should start improving.

 

- malls are getting busier, thus, making commercial real estate more valuable. If we get inflation at some point in the future and real estate prices/rentals make a come back - SHLD would be one of the largest beneficiary's as it controls a large commercial real estate portfolio.

 

- in a high inflation scenario SHLD also benefits with its low locked in rents, etc. while revenues should rise with inflation.

 

- in a delationary scenario - SHLD has limited debt compared to some other retailers, low rents, has contributed heavily to its pension plan, a fair amount of cash and flexible B/S.

 

- If SHLD is EL's BRK - he already has 6 different businesses within SHLD - BRK only had textiles in the beginning. The share buybacks reming me of what Singleton (Teledyne) did during tough times in the market.

 

- Online retailers have enjoyed an advantage over brick and mortar companies - no sales taxes. Online retailers will start paying sales taxes as governments look for more revenue. Most brick and mortar stores with a large online presence stand to benefit. The advantage that Amazon has enjoyed will be reduced and a lot of these sales could come back to large retailers with both an online and a physical presence. 

 

$40B in annual sales

Even at EBITDA of 5% on $40B in sales (or $2B) SHLD will do well purchased at current prices with no increase in sales.

 

Thus, the question is - $42/share - is this a reasonable price to pay. I think so and I am prepared to wait.

 

except his balance sheet is not that strong. his debt ratings are not good and the bonds trade below par. I own some sears bonds that trade at $12, down from $18-$19. finance 101. if your bonds trade below par buy them in before you buy back your stock. he also has big issues with underfunded pension.  3 years ago you could make your argument. but things have gone south in a big way. when you are losing money your balance sheet can go south in a hurry. that's what's happened. that's why he did the rights offering. to raise cash. his share buybacks were terrible uses of cash in hindsight. not like Singleton at all.

 

Is it possible that "RIMM never sleeps" is the reincarnation of Peter Burke CEO? Owning SHLD bonds made me pause....the calling card of Burke was consistent RIMM bashing, and I distinctly remember him hinting at picking up SHLD debt earlier this year or late last year when SHLD was under some stress.  Just throwing it out there.

[BargainValueHunter]

Can anyone shed some light on some of Eddie Lampert's previous investing/ asset allocation mistakes and failures?

 

He seems to have a rather impressive track record.

[rkbabang]

AMZN delivers a better experience to shoppers and I think customers who shop on AMZN only to cheat sales tax is a non-material percentage.

 

I don't own AMZN or SHLD, but I agree with you about AMZN.  I live in New Hampshire where there is no sales tax online or off and I find it easier to use Amazon.com rather than go to a physical store.  What does Sears have that is so compelling that I am going to actually physically go there when I don't have to?  This is a problem with any physical store without a strong online presence I think.  Even groceries we use PeaPod.com and get it delivered to our door.  Why people spend their lives driving from place to place to get these things done when it is no longer necessary I'll never understand.  Certainly the kids today will grow up and think it is oddly quaint that some older folks still like to drive around from place to place to place and aimlessly shop for things, never getting exactly what they want, but instead needing to settle for whatever the place they happen to be has in stock.

[Mikenhe]

AMZN delivers a better experience to shoppers and I think customers who shop on AMZN only to cheat sales tax is a non-material percentage.

 

I don't own AMZN or SHLD, but I agree with you about AMZN.  I live in New Hampshire where there is no sales tax online or off and I find it easier to use Amazon.com rather than go to a physical store.  What does Sears have that is so compelling that I am going to actually physically go there when I don't have to?  This is a problem with any physical store without a strong online presence I think.  Even groceries we use PeaPod.com and get it delivered to our door.  Why people spend their lives driving from place to place to get these things done when it is no longer necessary I'll never understand.  Certainly the kids today will grow up and think it is oddly quaint that some older folks still like to drive around from place to place to place and aimlessly shop for things, never getting exactly what they want, but instead needing to settle for whatever the place they happen to be has in stock.

 

I still like to go to the store for various things. I still need the tactile experience of touching things that I'm thinking of buying. That doesn;t mean that I will buy it in the store though. I have no loyalty to the store so I'm ok with checking out something in person then buying it online. Somethings I want to see and buy at the store..

IE - in the last few months I have been shopping at Best Buy - I saw the tv I wanted and liked the look of it plus was able to check out the look of the refresh rate of a 120hz tv vs a 60 and see where the ports were etc. I bought the tv at the store and took it home. I also checked out digital picture frames and cameras. Those I bought online because the price was better (and it was a deal on black friday - and it'll be a cold day in hell before I go to shop on that day!!)

 

plus going to the mall of new hampshire in December is a fate worse than death - although that obviously doesn;t stop plenty of people waiting an hour for a parking space!!

[alpha231616967560]

Is anyone else looking at SHLD bonds? The 2018 6.25's are trading at $74.75 for a YTM just under 13%.

[txlaw]

Is anyone else looking at SHLD bonds? The 2018 6.25's are trading at $74.75 for a YTM just under 13%.

 

Peter Burke probably is. ;D

[Guest hellsten]

Here are some quotes from Murray Stahl's writings on Sears:

http://www.horizonkinetics.com/docs/2011Q4_commentary.pdf

 

Everyone knows Sears, no one likes it. I mean it; I’ve met no one outside of Horizon Kinetics who likes

Sears. Nearly every person in this country of driving age has had an opportunity to be dismayed by the

shopping experience

 

Yet, if viewed as a real estate company, virtually every management decision has been logical. This was

the initial investment thesis when the position was established: that the ultimate value of the real estate

was worth more than the market capitalization of the company, and that the realization of that value

would be a long-term prospect, since it appeared that the controlling shareholder, Eddie Lampert, was

intent on first maximizing the cash flow available from the retail business. Indeed, since 1996, the

repurchase of shares has increased the amount of real estate owned per share by over 50%, which is no

small matter. If Sears has been engaged in a long-term end game of capitalizing the real estate, then

there would necessarily have to come a time when the stores would begin to reach a point of

diminishing returns. Eight years after Mr. Lampert became chairman, this appears to be happening to at

least some of the stores, and those are being closed; they are not being supported with additional

spending.

 

Of the roughly 4,000 Sears stores, some 800 are owned, and these encompass roughly 93 million square feet. If, merely

for momentary consideration, these are worth $200 per square foot, then this real estate is worth $18

billion, or $168 per share; at only $100 per square foot, the per-share value would be $85. If one

subtracts both the company’s net debt and capital lease obligations (net of cash) and pension and postretirement liability obligations of $33 per share, then the net value of the real estate is $52 per share.

Moreover, the balance sheet has been arranged such that it will not be until 2016 that the first major

debt maturities and credit line expirations take place. Thus, there will be a good four years for retailing

and housing (Sears sells the white goods—refrigerators, washing machines and dishwashers)—to

recover, for capitalization rates to improve, and for optionality to be realized within this enormous real

estate portfolio. Aside from the owned stores there is reason to believe that there are many long-term,

below-market leases among the 3,000-plus leased stores. These, too, have value as real estate. As does

the company’s 2 million square feet of owned office space at its headquarters in the Hoffman Estates

suburb of Chicago. There are other assets, too. Aside from whatever values are attached to the brands

that it owns (for example, Craftsman tools, Kenmore, Land’s End and DieHard car batteries), Sears is also

a major internet presence: it was listed as the 7 th largest internet retailer in 2011 by Internet Retailer,

directly behind Walmart.com.

 

Moreover, the balance sheet has been arranged such that it will not be until 2016 that the first major

debt maturities and credit line expirations take place. Thus, there will be a good four years for retailing

and housing (Sears sells the white goods—refrigerators, washing machines and dishwashers)—to

recover, for capitalization rates to improve, and for optionality to be realized within this enormous real

estate portfolio

 

More:

http://www.horizonkinetics.com/docs/3Q_CoreValue_Highlighted_Holdings.pdf

 

In addition to the widely-known retail outlets and

brands, Sears owns over 90 million square feet of retail real estate space.  In our view, the value

of this real estate space is not reflected in current market valuations of the company.  In order to

maximize cash flows through the sale or lease of underperforming properties, the company

created the SHC Realty division.  SHC Realty not only leases and sells full lots, but also maximizes

each property through the lease of off lots, demised space and separated in-line retail lots.

Considering the current uncertainty with regard to the economy, particularly the real estate

market, investors have failed to properly recognize this endeavor which is likely to produce

exceptional long-term value.

 

http://www.horizonkinetics.com/docs/Spin_Commentary_September2012.pdf

http://www.horizonkinetics.com/docs/Horizon_Commentary_4thQuarter_2010.pdf

 

I don't own Sears, but will probably buy it very soon. I like misunderstood stocks that stink and owner-operators like Eddie Lampert. I also like what Murray Stahl and Bruce Berkowitz have written about the company. Stahl puts the value of the real estate at $85 (same as Berkowitz in 2009) take away liabilities and you have $52 left, and that's just the real estate.

[ERICOPOLY]

Indeed, since 1996, the repurchase of shares has increased the amount of real estate owned per share by over 50%, which is no small matter.

 

I don't want to belittle the author's point, but a commercial REIT yielding 7% does the same thing for the investor who purchases more shares with the distribution.  So it does seem to be a relatively small matter.

 

What am I missing?

 

EDIT:  Although the author wrote 1996 I presume he meant 2006

[giofranchi]

I don't own Sears, but will probably buy it very soon. I like misunderstood stocks that stink and owner-operators like Eddie Lampert. I also like what Murray Stahl and Bruce Berkowitz have written about the company. Stahl puts the value of the real estate at $85 (same as Berkowitz in 2009) take away liabilities and you have $52 left, and that's just the real estate.

 

hellsten,

just one simple thought: I like owner-operators, because first of all I want to partner with outstanding managers. An Mr. Lampert is an outstanding manger, no doubt about it. But I also want to be in a business that I like. For instance, I like insurance (FFH, LRE), I like the media sector (LMCA), and I like the money management business (OAK). But I don’t like retail. So, though I certainly seek to partner with managers as good as Mr. Lampert, that’s not enough for me… These requirements must BOTH be met, for me to pull the trigger:

1) A great manager / capital allocator

2) A business that I like

Of course, also requirement 3) is most important: a good price. But without 1) AND 2) I almost never invest.

 

giofranchi

 

[wisdom]

Gio - Is SHLD in retail or is it that some of it's subsidiaries are? We are not talking of Sears Roebuck here but Sears Holdings. I find too often people think them to be one and the same. Is BRK in retail because it own's NFM?

 

From SHLD - 10k

 

Sears Holdings Corporation (“Holdings,” “we,” “us,” “our,” or the “Company”) is the parent company of Kmart Holding Corporation (“Kmart”) and Sears, Roebuck and Co. (“Sears”). Holdings was formed as a Delaware corporation in 2004 in connection with the merger of Kmart and Sears (the “Merger”) on March 24, 2005. We are a broadline retailer with 2,201 full-line and 1,354 specialty retail stores in the United States operating through Kmart and Sears and 483 full-line and specialty retail stores in Canada operating through Sears Canada Inc. (“Sears Canada”), a 92%-owned subsidiary.

 

This is why I believe that the probability of failure at the holding company level to be lower than the retail business - let me know if my thinking is wrong.

 

 

[txlaw]

A couple things I would note about SHLD. 

 

First, they are trying their best to create a strong online presence and to convert to a "members-based business model."  So while SHLD is no AMZN, they understand the new world of retail.  ESL has been one of those smart cookies who saw this coming a long time ago (see AN, GPS, etc.).

 

Second, take a look at Sears Hometown (SHOS).  Not only were comps up this quarter, but they are increasing their stores on a net basis.  Why is this important?  Because one ought to be able to see that SHLD is trying to preserve its dominant share in appliances by continuing to convert part of the existing store base to an appliance and tool only format via Hometown.  Money losing stores will be sold off/subleased, but stores that break even will continue to break even so long as they preserve Sears' position, as they cannot just shut down all of the stores and expect to maintain their cost advantages as a large distributor of appliances and tools.

 

IMO, ESL has finally shown us the plan, and they're executing quite well.

[FCharlie]

 

I don't own Sears, but will probably buy it very soon. I like misunderstood stocks that stink and owner-operators like Eddie Lampert. I also like what Murray Stahl and Bruce Berkowitz have written about the company. Stahl puts the value of the real estate at $85 (same as Berkowitz in 2009) take away liabilities and you have $52 left, and that's just the real estate.

 

 

With Sears, the liabilities (pension) disappear with higher interest rates. At the 2010 annual meeting I asked Mr. Lampert about this and after checking w/ the CFO, came back with an answer that every 1% change in interest rates would impact pension liabilities by $500 million dollars.

 

Sears could be the ultimate sleeper. Sit back and accumulate cheap and wait for two things. One, higher interest rates and two, a rebound in real estate.

 

It's just a shame that they don't produce enough cash to repurchase shares anymore.

 

 

[compoundinglife]

A couple things I would note about SHLD. 

 

First, they are trying their best to create a strong online presence and to convert to a "members-based business model."  So while SHLD is no AMZN, they understand the new world of retail.  ESL has been one of those smart cookies who saw this coming a long time ago (see AN, GPS, etc.).

 

I have spent a bunch of time reviewing SHLD employees on LinkedIn and monitoring there job postings for technology people. I think on tech and ecom. side they are heading in the right direction, like the fact that are attempting to embrace a more agile approach to IT and leverage more open source style solutions. Unfortunately there is no way they can recruit the technical talent that is required to go toe to toe with AMZN on retail as you mentioned. But on the flip side I don't think Costco or Walmart can either I think you will basically have AMZN at the top and the rest fighting for the second through fifth place. Maybe we will sears.com running on AWS in a couple of years.

 

 

[txlaw]

A couple things I would note about SHLD. 

 

First, they are trying their best to create a strong online presence and to convert to a "members-based business model."  So while SHLD is no AMZN, they understand the new world of retail.  ESL has been one of those smart cookies who saw this coming a long time ago (see AN, GPS, etc.).

 

I have spent a bunch of time reviewing SHLD employees on LinkedIn and monitoring there job postings for technology people. I think on tech and ecom. side they are heading in the right direction, like the fact that are attempting to embrace a more agile approach to IT and leverage more open source style solutions. Unfortunately there is no way they can recruit the technical talent that is required to go toe to toe with AMZN on retail as you mentioned. But on the flip side I don't think Costco or Walmart can either I think you will basically have AMZN at the top and the rest fighting for the second through fifth place. Maybe we will sears.com running on AWS in a couple of years.

 

Didn't mean to suggest they can go toe to toe with AMZN.

 

Instead, I think that Sears, in particular, could be successful by being an integrated retailer for appliances and tools, and parts associated with those goods (see PartsDirect). 

 

If indeed they grow their e-commerce to its full potential, perhaps they will use outsourced cloud infrastructure like AWS, rather than their own data centers. 

[compoundinglife]

A couple things I would note about SHLD. 

 

First, they are trying their best to create a strong online presence and to convert to a "members-based business model."  So while SHLD is no AMZN, they understand the new world of retail.  ESL has been one of those smart cookies who saw this coming a long time ago (see AN, GPS, etc.).

 

I have spent a bunch of time reviewing SHLD employees on LinkedIn and monitoring there job postings for technology people. I think on tech and ecom. side they are heading in the right direction, like the fact that are attempting to embrace a more agile approach to IT and leverage more open source style solutions. Unfortunately there is no way they can recruit the technical talent that is required to go toe to toe with AMZN on retail as you mentioned. But on the flip side I don't think Costco or Walmart can either I think you will basically have AMZN at the top and the rest fighting for the second through fifth place. Maybe we will sears.com running on AWS in a couple of years.

 

Didn't mean to suggest they can go toe to toe with AMZN.

 

Instead, I think that Sears, in particular, could be successful by being an integrated retailer for appliances and tools, and parts associated with those goods (see PartsDirect). 

 

If indeed they grow their e-commerce to its full potential, perhaps they will use outsourced cloud infrastructure like AWS, rather than their own data centers.

 

Nope. I don't believe they can rival AMZN. I expect they will remain in the top 10 but I don't believe they will be able to go toe for toe and I don't think they need to nor should they try. AMZNs head start in online retail, company culture and depth of technical talent is something SHLD can't rival. If sears.com can stay in the top 10 and not bleed money that is enough for me.

[PlanMaestro]

Not to mess with the thread – hey, I am watching SHLD too – but I don't remember seeing this Buffett opinion shared.

 

http://www.fool.com/community/pod/2005/050713.htm

 

Q: What is your opinion of the prospects for the Kmart/Sears merger? How will Eddie Lambert do at bringing Kmart and Sears together?

 

Nobody knows. Eddie is a very smart guy but putting Kmart and Sears together is a tough hand. Turning around a retailer that has been slipping for a long time would be very difficult. Can you think of an example of a retailer that was successfully turned around? Broadcasting is easy; retailing is the other extreme. If you had a network television station 50 years ago, you didn't really have to invent or being a good salesman. The network paid you; car dealers paid you, and you made money.

 

But in retail you have to be smarter than Wal-Mart. Every day retailers are constantly thinking about ways to get ahead of what they were doing the previous day.

 

Retailing is like shooting at a moving target. In the past, people didn't like to go excessive distances from the street cars to buy things. People would flock to those retailers that were near by. In 1996 we bought the Hochschild Kohn department store in Baltimore. We learned quickly that it wasn't going to be a winner, long-term, in a very short period of time. We had an antiquated distribution system. We did everything else right. We put in escalators. We gave people more credit. We had a great guy running it, and we still couldn't win. So we sold it around 1970. That store isn't there anymore. It isn't good enough that there were smart people running it.

 

It will be interesting to see how Kmart and Sears play out. They already have a lot of real estate, and have let go of a bunch of Sears' management (500 people). They've captured some savings already.

 

We would rather look for easier things to do. The Buffett grocery stores started in Omaha in 1869 and lasted for 100 years. There were two competitors. In 1950, one competitor went out of business. In 1960 the other closed. We had the whole town to ourselves and still didn't make any money.

 

How many retailers have really sunk, and then come back? Not many. I can't think of any. Don't bet against the best. Costco is working on a 10-11% gross margin that is better than the Wal-Mart's and Sams'. In comparison, department stores have 35% gross margins. It's tough to compete against the best deal for customers. Department stores will keep their old customers that have a habit of shopping there, but they won't pick up new ones. Wal-Mart is also a tough competitor because others can't compete at their margins. It's very efficient.

 

If Eddie sees it as impossible, he won't watch it evaporate. Maybe he can combine certain things and increase efficiencies, but he won't be able to compete against Costco's margins.

 

 

[ShahKhezri]

When was the last time you bought a lawn mower, tools, a washer/dryer, diehard battery online?

 

I understand why they should get out of soft retail and pharmacy/grocery for K-Mart...I don't see why they should get out markets they hold their own. 

 

The sales willl continue to shrink and shrink...but the EBITDA margin has some real upside.  Also, their liquidity position is night/day from last year.  They could so sale/leaseback of their hq or their 12 distribution centers and raise 1-2Bn.  Easily.  They already have plans to raise another $500MM in monetiziations in the next 12 months. 

 

If you grade the company on what they should have done/said vs. what they did for 2012, SHLD has done a great job.  Earlier this year, they said they would raise $1.7Bn, they already did.  You can blame him for repurchasing at a high price...but you didn't pay for that...the people at $100+ did.

 

I initiated 1/10th of my position today.  Hope it goes lower and lower.  I've had great 'luck' with SHLD, I've sold puts on 8 times and never been put the stock.  A couple of years back, I bought at 28 and sold at 105.  This time, I'm looking at holding longer term. 

 

 

[txlaw]

When was the last time you bought a lawn mower, tools, a washer/dryer, diehard battery online?

 

I understand why they should get out of soft retail and pharmacy/grocery for K-Mart...I don't see why they should get out markets they hold their own. 

 

The sales willl continue to shrink and shrink...but the EBITDA margin has some real upside.  Also, their liquidity position is night/day from last year.  They could so sale/leaseback of their hq or their 12 distribution centers and raise 1-2Bn.  Easily.  They already have plans to raise another $500MM in monetiziations in the next 12 months. 

 

If you grade the company on what they should have done/said vs. what they did for 2012, SHLD has done a great job.  Earlier this year, they said they would raise $1.7Bn, they already did.  You can blame him for repurchasing at a high price...but you didn't pay for that...the people at $100+ did.

 

I initiated 1/10th of my position today.  Hope it goes lower and lower.  I've had great 'luck' with SHLD, I've sold puts on 8 times and never been put the stock.  A couple of years back, I bought at 28 and sold at 105.  This time, I'm looking at holding longer term.

 

Re: buying lawn mower, tools, a washer/dryer, diehard battery, online, I think it's not out of the question to see more sales of such goods online, especially if we start seeing more same day delivery to homes or pick-up lockers.  Heck, I bought my current flat screen TV over five years ago from Amazon, and I would have never thought I'd do such a thing ten years ago.

 

In other words, the showroom effect could certainly translate to these types of goods.  However, Sears has something going for them, which is they already have a huge market share here, which gives them buying power, and these are goods that people tend to like to see and feel.  This could allow them to make the smaller format stores essentially showrooms and points of pick up, where the transaction is consummated via the Internet. 

 

SHLD gets this possible threat, which explains their new membership model and focus on "integrated retail." 

 

The odd thing about the current price action in SHLD is that it SHLD is in better shape today than it has been in in a while, except with regards to the pension fund, which as someone has already pointed out will be much less underfunded in a normal interest rate and environment, and which is now at the level where buyouts are possible.

 

I would love to see this thing go sub-$30.  I will load up.

[ShahKhezri]

I agree.  Also, with the pension, they purchased $250MM of the 6.625%, I'm curious to see if they use the $203MM they funded this quarter to buy more of the bonds and get the 10%+ yield.  It would be really interesting to see what his plans are with the pension and ESL's investments in the commercial paper. 

 

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.

 

I think with SHLD, one of the catalysts will always be a short squeeze.

[rkbabang]

When was the last time you bought a lawn mower, tools, a washer/dryer, diehard battery online?

 

It just so happens that I bought a washer and dryer in the last year online.  As well as remodeling my kitchen and buying a double convection wall oven, cooktop, ventilation system, dishwasher, farmers sink, round stainless sink and faucets online.  We had a Sub-Zero fridge already but it was white, we bought stainless panels for it online and I found a new front grill for it on Craigslist, still in the box. The only thing I purchased offline was the cabinets and marble.

[texual]

SHLD is a good investment. It just isn't for everyone.

[ItsAValueTrap]

http://www.fool.com/community/pod/2005/050713.htm

 

Thanks for posting that interview... I enjoyed it.

 

What I don't understand is why people on this board aren't dissecting Walmart, Costco, Dollar General, etc.