SHLDQ - Sears Holdings Corp

[tombgrt]

If the company doesn't go bankrupt next week, I don't know why you would want to hold this increasingly expensive short at close to the 52 week low.  I own stock and calls.

 

That's a good way of phrasing the reason why I decided to make a trade of it.  The people who trade based on charts should get sucked into it and that should make the short more expensive by the day.  So then it turns and people who trade on charts+momentum will find it attractive.  But it seems like this goes on every year and it stalls out no lower than $60.  Meanwhile, so long as there is nothing immediately pressing (liquidity) to make the stock suddenly dive lower, this trading is probably relatively safe as far as trading goes.  And the tons of assets they possess make that nearly a lock.

 

Why not go for some '15 OTM options then? You could even go for short-dated options since you can use the tax losses? If not you get an easy bagger if this one spikes up again. Of course, this would be a trade pure sang. I think most of the last 100 posts were mainly conjecture about what "might be".

[ERICOPOLY]

Today I read that Fairholme is opening to new investors again.  Some new money will likely go into SHLD.

[Luke 532]

1) Lampert's 29% annuallized returns: Do you have any solid substantiation for this? I see articles online, dating from 2006 to 2013, claiming this 29% number. I suspect that 29% was correct at one time -- maybe in 2006 -- and has been used blindly since.

 

I am not a partner at ESL so I don't know for sure.  I just did some digging and this is the latest article (2012) that I could find that mentions his returns... they claim 21% annualized since 1988, which isn't surprising since there haven't been any returns from SHLD in the past 9 years or so. http://www.nxtbook.com/nxtbooks/ii/IF_0466/index.php?startid=77

 

2) Shopyourway being the #3 online retailer: Looking at traffic ranks on alexa.com, sears.com and shopyourway.com are nowhere in the picture. The highest ranking according to sales that I could find was this article from Internet Retailer, which suggests that Sears was the #8 online retailer earlier this year: http://www.internetretailer.com/2013/03/21/sears-sparks-web-sales-growth-personalization. Of course the same site says that walmart.com was #4: http://www.internetretailer.com/2013/08/15/wal-marts-online-sales-increase-30-first-half-2013. Which source claims that Shopyourway is the #3 online retailer?

 

This is based on traffic, not sure how it translates in terms of sales.  And it's Sears Marketplace, not necessarily ShopYourWay.  I consider all the Sears online stuff as cumulative.

 

WSJ from July 21, 2013

http://online.wsj.com/article/SB10001424127887324263404578613751354714698.html?mod=WSJ_hps_LEFTTopStories#articleTabs%3Darticle

"Sears's Marketplace is now the third-largest online vendor market by number of visits, but it trails Amazon and eBay by a wide margin, according to comScore. In June, Amazon had 98 million unique visitors, eBay had 69 million and Sears had 18 million."

[Luke 532]

Today I read that Fairholme is opening to new investors again.  Some new money will likely go into SHLD.

 

I read that, too, and that was my first thought.  Of his top 5 holdings SHLD is the only one in which he added a meaningful amount in Q2... by a factor of 12 if you compare percentages (4.53/0.36=12+)

 

AIG +0.29%

BAC +0.36%

SHLD +4.53%

JOE -0.07%

LUK -0.56%

http://www.nasdaq.com/article/bruce-berkowitzs-top-second-quarter-holdings-cm268020

[krazeenyc]

Today I read that Fairholme is opening to new investors again.  Some new money will likely go into SHLD.

 

I read that, too, and that was my first thought.  Of his top 5 holdings SHLD is the only one in which he added a meaningful amount in Q2... by a factor of 12 if you compare percentages (4.53/0.36=12+)

 

AIG +0.29%

BAC +0.36%

SHLD +4.53%

JOE -0.07%

LUK -0.56%

http://www.nasdaq.com/article/bruce-berkowitzs-top-second-quarter-holdings-cm268020

 

I dont' think he can really meaningfully add to AIG lol that position including his warrants (even not including is so gigantic). 

 

t-bone you can add "krazeenyc" to the people with 5000+ shares :D . Now one of my top 6 holdings.

[Luke 532]

Today I read that Fairholme is opening to new investors again.  Some new money will likely go into SHLD.

 

I read that, too, and that was my first thought.  Of his top 5 holdings SHLD is the only one in which he added a meaningful amount in Q2... by a factor of 12 if you compare percentages (4.53/0.36=12+)

 

AIG +0.29%

BAC +0.36%

SHLD +4.53%

JOE -0.07%

LUK -0.56%

http://www.nasdaq.com/article/bruce-berkowitzs-top-second-quarter-holdings-cm268020

 

I dont' think he can really meaningfully add to AIG lol that position including his warrants (even not including is so gigantic). 

 

t-bone you can add "krazeenyc" to the people with 5000+ shares :D . Now one of my top 6 holdings.

 

Nor BAC for that matter... "I would add more if I could" he has said (restricted by mutual fund laws)

[Luke 532]

I haven't seen anything like this since FFH in 2006.  There are 14 million shares out and roughly 100% of the shares already accounted for.  Depending on how you want to calculate what the float is, the math could get difficult for the shorts (short interest is up 5.9 million shares in last 3 months).

 

Food for thought.

 

Looking at the history of SHLD price fluctuations we'll see a notable squeeze in early 2012.  But this is only because of the high short interest and rushing to cover.  Moves like this might seem pedestrian once the dynamics of SHLD ownership hit a level where there are simply no shares to be sold to those that need to cover.  Volkswagen anyone?

 

From January-March 2012...

http://seekingalpha.com/article/462841-the-sears-short-squeeze-is-loosening-up

Sears (SHLD) has seen the most incredible short squeeze within S&P500 stocks this year, pushing the stock up 131.3% year-to-date even though the news surrounding the business has been nothing but horrendous, both due to the losses SHLD reported, and the ongoing executive exodus.

 

[Luke 532]

I’ve thought about the combination of a long-term investment in which I’m bullish and the potential epic short squeeze.  This will sound odd, and it’s certainly not a value investing principle, but the strong possibility of a squeeze could almost serve as a “margin of safety” (I’m using that term VERY loosely to make a point) for those that are not convinced of SHLD’s long-term potential.  The trading range has been roughly $40-$80 for the past year or so… without any real squeeze to speak of.  The possibility of a squeeze at some point seems fairly likely.  If somebody is unsure as to the long-term prospects of SHLD, or they really like the upside but are unsure of the downside, they could buy the stock in the low-$40’s with the expectation of a squeeze.  If the stock gets to $65-ish one could then buy the $45-strike puts for, say, $5 (or whatever the prices would work out to be)… thus ensuring no loss of your capital.  If the stock continues to rise indefinitely commencing Lampert's "Berkshire moment" then all you have lost is the $5 option premium.  If the stock plummets, proving your hesitation to invest in the first place is correct at least in the short-term, then you have lost nothing. 

 

This isn’t something I necessarily recommend but if we do get a squeeze buying a put at that time could be a strategy for those not 100% sold on the long-term prospects of SHLD.  Again, just a thought.

[CorpRaider]

Wow, what was all that prima donna stuff about closing the fund and moving to a hedge fund form?

[treasurehunt]

1) Lampert's 29% annuallized returns: Do you have any solid substantiation for this? I see articles online, dating from 2006 to 2013, claiming this 29% number. I suspect that 29% was correct at one time -- maybe in 2006 -- and has been used blindly since.

 

I am not a partner at ESL so I don't know for sure.  I just did some digging and this is the latest article (2012) that I could find that mentions his returns... they claim 21% annualized since 1988, which isn't surprising since there haven't been any returns from SHLD in the past 9 years or so. http://www.nxtbook.com/nxtbooks/ii/IF_0466/index.php?startid=77

 

2) Shopyourway being the #3 online retailer: Looking at traffic ranks on alexa.com, sears.com and shopyourway.com are nowhere in the picture. The highest ranking according to sales that I could find was this article from Internet Retailer, which suggests that Sears was the #8 online retailer earlier this year: http://www.internetretailer.com/2013/03/21/sears-sparks-web-sales-growth-personalization. Of course the same site says that walmart.com was #4: http://www.internetretailer.com/2013/08/15/wal-marts-online-sales-increase-30-first-half-2013. Which source claims that Shopyourway is the #3 online retailer?

 

This is based on traffic, not sure how it translates in terms of sales.  And it's Sears Marketplace, not necessarily ShopYourWay.  I consider all the Sears online stuff as cumulative.

 

WSJ from July 21, 2013

http://online.wsj.com/article/SB10001424127887324263404578613751354714698.html?mod=WSJ_hps_LEFTTopStories#articleTabs%3Darticle

"Sears's Marketplace is now the third-largest online vendor market by number of visits, but it trails Amazon and eBay by a wide margin, according to comScore. In June, Amazon had 98 million unique visitors, eBay had 69 million and Sears had 18 million."

 

Ok. Note that "online vendor market" is not the same as "online retailer". The WSJ article you linked to talks about online marketplaces for third-party vendors. Apparently Sears is now #3 in this category behind Amazon and EBay. Not shabby at all, but not as impressive as being the #3 online retailer.

 

BTW, I am not just criticizing your input blindly; I am trying to get an idea of how good Sears' assets are and how impressive Lampert is. Your posts have gotten me thinking about Sears as an investment again.

[ERICOPOLY]

If the company doesn't go bankrupt next week, I don't know why you would want to hold this increasingly expensive short at close to the 52 week low.  I own stock and calls.

 

That's a good way of phrasing the reason why I decided to make a trade of it.  The people who trade based on charts should get sucked into it and that should make the short more expensive by the day.  So then it turns and people who trade on charts+momentum will find it attractive.  But it seems like this goes on every year and it stalls out no lower than $60.  Meanwhile, so long as there is nothing immediately pressing (liquidity) to make the stock suddenly dive lower, this trading is probably relatively safe as far as trading goes.  And the tons of assets they possess make that nearly a lock.

 

Why not go for some '15 OTM options then? You could even go for short-dated options since you can use the tax losses? If not you get an easy bagger if this one spikes up again. Of course, this would be a trade pure sang. I think most of the last 100 posts were mainly conjecture about what "might be".

 

I hold 80% of my common SHLD stock in the RothIRA tax free account.  On the whole I'm leveraged but I hedged the BAC side of the pie because the puts are much cheaper.  I don't have any SHLD options at present.

 

I bet the stock is up a good amount tomorrow with news of Berkowitz raising more money.

[CorpRaider]

Their online presence does kick the ever-loving crap out of the other "department stores" though, now that you mention it, doesn't it? 

[muscleman]

Today I read that Fairholme is opening to new investors again.  Some new money will likely go into SHLD.

 

Very interesting. Do you think he is raising funds for SHLD or Freddie and Fannie man preferred, or maybe all of them?

 

It is a bit strange that until now, he still hasn't had his hedge fund setup.

[Luke 532]

http://www.nasdaq.com/symbol/shld/short-interest

 

14.09M short (as of 7/31)

20.77 days to cover

 

Has anybody done the updated calculation yet on shares owned by ESL, RBS, Lampert, Fairholme, and Tisch?

 

If float is 25.5M (I think it's a little less actually), short interest is >55% of the float.

 

VW, TSLA... SHLD

[jeffmori7]

http://www.nasdaq.com/symbol/shld/short-interest

 

14.09M short (as of 7/31)

20.77 days to cover

 

Has anybody done the updated calculation yet on shares owned by ESL, RBS, Lampert, Fairholme, and Tisch?

 

If float is 25.5M (I think it's a little less actually), short interest is >55% of the float.

 

VW, TSLA... SHLD

 

Hey Luke, are you smoking? :) T-bone made this calculation like 20 posts ago, and you answered him that this had already been discussed on this thread!!!

[Luke 532]

http://www.nasdaq.com/symbol/shld/short-interest

 

14.09M short (as of 7/31)

20.77 days to cover

 

Has anybody done the updated calculation yet on shares owned by ESL, RBS, Lampert, Fairholme, and Tisch?

 

If float is 25.5M (I think it's a little less actually), short interest is >55% of the float.

 

VW, TSLA... SHLD

 

Hey Luke, are you smoking? :) T-bone made this calculation like 20 posts ago, and you answered him that this had already been discussed on this thread!!!

 

Hah!  I know, T-bone1 mentioned it was about 91M shares but that includes Baker Street and some others that I don't consider quite as permanent as Berkowitz, Lampert, and Tisch.  Anybody know the count just for them?

 

And it actually has been a long day... woke up about two hours earlier than normal and didn't quite get enough coffee so I'm running on fumes here. :-)

[texual]

So we should all agree to buy SHLD tomorrow? lol

[Luke 532]

So we should all agree to buy SHLD tomorrow? lol

 

Yes, and don't put in your sell order anywhere under $500 :-)

[texual]

I am super disappointed with Fairholme opening the fund again. There was something special about FAIRX's incredible history and Bruce Berkowitz defiantly saying no to short term owners and going through that bad patch ever again. I thought he was opening a special vehicle or making FAIRX a limited partnership. Too bad because his decision to reverse a few months later seems absurd. If he really wants to up the bet on Fannie and Freddie why can't he just shift funds around and sell the smaller names and use that to buy more of what he likes?

 

Shame.

[texual]

ESL filed today another round of AutoNation sales.

 

Tick-tick-ticking away, but this time I want to stay around for the boom ;)

[Luke 532]

I am super disappointed with Fairholme opening the fund again. There was something special about FAIRX's incredible history and Bruce Berkowitz defiantly saying no to short term owners and going through that bad patch ever again. I thought he was opening a special vehicle or making FAIRX a limited partnership. Too bad because his decision to reverse a few months later seems absurd. If he really wants to up the bet on Fannie and Freddie why can't he just shift funds around and sell the smaller names and use that to buy more of what he likes?

 

Shame.

 

I agree, but he probably hated selling some companies that are likely worth much more than where they are trading today.  MBIA for example.  Probably worth $20-$25 and he was selling under $16.  Plus, if he wants to load up on FNMAS and SHLD the quickest way to do that is to get money in the fund now.

[Luke 532]

ESL filed today another round of AutoNation sales.

 

Tick-tick-ticking away, but this time I want to stay around for the boom ;)

 

Another 200K shares gone!  Thanks for the heads up, texual.

[texual]

I sometimes wonder if Fairholmes accumulation of SHLD ever pissed ESL off...

 

I mean it is in opposition to ESL's goal to own as much stock as he can, and who is this fly in the ointment coming around every quarter and sucking away another million stock certificates.

[wisdom]

Challenging economy according to Walmart. Hopefully, it knocks down the price.

[FCharlie]

 

 

If float is 25.5M (I think it's a little less actually), short interest is >55% of the float.

 

VW, TSLA... SHLD

 

 

You know, waiting for a great VW style squeeze in SHLD is sort of like waiting for the Great Pumpkin to rise up out of the pumpkin patch. 

 

I think the smarter strategy is to sell both puts & calls and take advantage of the insane premiums on both.  This has been the correct strategy for years. If you get put the stock, just sell calls until Eddie Lampert files a form 4 showing he's made yet another purchase of SHLD shares or until they sell a few stores for a few hundred million dollars, then the stock soars. If you get called out of your shares, just sell puts until the next disappointing earnings report comes out, usually every three months.