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Is It Time For Sears Holdings (SHLD) To Nosedive?
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In today's Wall Street Journal, the Heard on the Street column had a negative piece on Sears Holdings (Nasdaq: SHLD). The column thinks Sears is overvalued and its due for a larger selloff.
Despite the current market environment, Sears still trades at a lofty 26 times this year's expected earnings. In comparison, Wal-Mart (NYSE: WMT) and Costco (Nasdaq: COST)-- both of which reported higher same-store sales last month, are trading in the mid-to-high teens.
Sears still trades at this lofty valuation despite steadily declining same-store sales and plummeting profitability over the past 18 months. The Journal thinks Sears stock will fall as the looming recession dampens consumer spending.
Part of the reason Sears could be trading at this expensive valuation as compared to other companies, is because it was included in the no-short-sale list. The short sale ban expired yesterday, and, Sears did fall in like kind. Additionally, Sears benefits from a relatively small float, as SHLD has continued to buy back stock.
Sears Holdings Corporation is the parent company of Kmart Holding Corporation (Kmart) and Sears, Roebuck and Co. (Sears).
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+1.32Comments View All Comments
''LOSE MONEY'' WITH JIM CRAMER
CRAMER SAID TO BUY SEARS AT $180.
GREAT GRANDCHILDEREN
BUY SEARS STOCK TODAY AND IF SEARS SURVIVES YOUR GRANDCHILDEREN'S GRANNDCHILDEREN WILL LOVE YOU FOR IT.
THE GOVERNMENT
It is amazing that the law on naked shorting is not being enforced even though it is illegal and can destroy companies. POOR AMERICANS
SEARS AND LAMPERT
DOW AND MSF I AGREE 100 PERCENT. LAMPERT SEEMS TO SAY ANALYSTS ARE ACTING AS IF SEARS HAS NO REVENUE,,,,WELL WHAT GOOD IS THE REVENUE IF AFTER ALL IS DONE SEARS IS LOSING MONEY. AS FAR AS A RETIL PLAY AT LEAST REITS PAY A DIVIDEND WHILE YOU WAIT.
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TOOD O'SULLIVAN
TODD O'SULLIVAN on Oct 13, 2008 08:47 AMWHERE'S TODD? HIDING?