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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 6/10

vs
industry
vs
history
Cash to Debt 0.08
NAS:SHLD's Cash to Debt is ranked lower than
92% of the 951 Companies
in the Global Department Stores industry.

( Industry Median: 1.07 vs. NAS:SHLD: 0.08 )
Ranked among companies with meaningful Cash to Debt only.
NAS:SHLD' s Cash to Debt Range Over the Past 10 Years
Min: 0.07  Med: 0.43 Max: 8.36
Current: 0.08
0.07
8.36
Equity to Asset -0.17
NAS:SHLD's Equity to Asset is ranked lower than
99% of the 931 Companies
in the Global Department Stores industry.

( Industry Median: 0.48 vs. NAS:SHLD: -0.17 )
Ranked among companies with meaningful Equity to Asset only.
NAS:SHLD' s Equity to Asset Range Over the Past 10 Years
Min: -0.17  Med: 0.36 Max: 0.52
Current: -0.17
-0.17
0.52
F-Score: 5
Z-Score: 1.64
M-Score: -2.01
WACC vs ROIC
11.00%
-173.70%
WACC
ROIC
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 3/10

vs
industry
vs
history
Operating margin (%) -3.98
NAS:SHLD's Operating margin (%) is ranked lower than
88% of the 946 Companies
in the Global Department Stores industry.

( Industry Median: 3.37 vs. NAS:SHLD: -3.98 )
Ranked among companies with meaningful Operating margin (%) only.
NAS:SHLD' s Operating margin (%) Range Over the Past 10 Years
Min: -4.83  Med: -0.73 Max: 4.76
Current: -3.98
-4.83
4.76
Net-margin (%) -4.49
NAS:SHLD's Net-margin (%) is ranked lower than
86% of the 945 Companies
in the Global Department Stores industry.

( Industry Median: 2.10 vs. NAS:SHLD: -4.49 )
Ranked among companies with meaningful Net-margin (%) only.
NAS:SHLD' s Net-margin (%) Range Over the Past 10 Years
Min: -7.55  Med: -1.11 Max: 2.81
Current: -4.49
-7.55
2.81
ROA (%) -8.85
NAS:SHLD's ROA (%) is ranked lower than
89% of the 951 Companies
in the Global Department Stores industry.

( Industry Median: 2.81 vs. NAS:SHLD: -8.85 )
Ranked among companies with meaningful ROA (%) only.
NAS:SHLD' s ROA (%) Range Over the Past 10 Years
Min: -13.73  Med: -2.19 Max: 4.93
Current: -8.85
-13.73
4.93
ROC (Joel Greenblatt) (%) -24.46
NAS:SHLD's ROC (Joel Greenblatt) (%) is ranked lower than
91% of the 947 Companies
in the Global Department Stores industry.

( Industry Median: 13.35 vs. NAS:SHLD: -24.46 )
Ranked among companies with meaningful ROC (Joel Greenblatt) (%) only.
NAS:SHLD' s ROC (Joel Greenblatt) (%) Range Over the Past 10 Years
Min: -23.54  Med: -0.91 Max: 25.1
Current: -24.46
-23.54
25.1
Revenue Growth (3Y)(%) -12.70
NAS:SHLD's Revenue Growth (3Y)(%) is ranked lower than
87% of the 791 Companies
in the Global Department Stores industry.

( Industry Median: 2.10 vs. NAS:SHLD: -12.70 )
Ranked among companies with meaningful Revenue Growth (3Y)(%) only.
NAS:SHLD' s Revenue Growth (3Y)(%) Range Over the Past 10 Years
Min: -12.7  Med: 2.50 Max: 25.6
Current: -12.7
-12.7
25.6
EPS Growth (3Y)(%) 8.60
NAS:SHLD's EPS Growth (3Y)(%) is ranked higher than
64% of the 603 Companies
in the Global Department Stores industry.

( Industry Median: 1.10 vs. NAS:SHLD: 8.60 )
Ranked among companies with meaningful EPS Growth (3Y)(%) only.
NAS:SHLD' s EPS Growth (3Y)(%) Range Over the Past 10 Years
Min: -59.2  Med: -19.70 Max: 56
Current: 8.6
-59.2
56
» NAS:SHLD's 10-Y Financials

Financials (Next Earnings Date: Est. 2016-06-08)


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow
Oprt. Cash Flow & Net Income

» Details

Guru Trades

Q2 2015

SHLD Guru Trades in Q2 2015

Jim Simons 446,100 sh (+171.85%)
Leon Cooperman 1,575,352 sh (+81.34%)
Bruce Berkowitz 26,629,448 sh (+2.46%)
Francis Chou 896,088 sh (unchged)
Steve Mandel 2,163,100 sh (unchged)
Fairholme Fund 14,212,673 sh (unchged)
Murray Stahl 4,876,805 sh (-1.96%)
Edward Lampert 25,438,271 sh (-3.78%)
» More
Q3 2015

SHLD Guru Trades in Q3 2015

Bruce Berkowitz 26,650,148 sh (+0.08%)
Francis Chou 896,088 sh (unchged)
Steve Mandel 2,010,000 sh (unchged)
Fairholme Fund 14,212,673 sh (unchged)
Murray Stahl 4,424,070 sh (-9.28%)
Edward Lampert 22,347,082 sh (-12.15%)
Jim Simons 160,300 sh (-64.07%)
Leon Cooperman 300,000 sh (-80.96%)
» More
Q4 2015

SHLD Guru Trades in Q4 2015

Bruce Berkowitz 28,203,148 sh (+5.83%)
Fairholme Fund 14,219,873 sh (+0.05%)
Francis Chou 896,088 sh (unchged)
Steve Mandel 2,010,000 sh (unchged)
Leon Cooperman Sold Out
Edward Lampert 22,336,105 sh (-0.05%)
Murray Stahl 3,129,713 sh (-29.26%)
Jim Simons 99,800 sh (-37.74%)
» More
Q1 2016

SHLD Guru Trades in Q1 2016

Francis Chou 1,031,610 sh (+15.12%)
Fairholme Fund 14,497,773 sh (+1.95%)
Edward Lampert 22,336,105 sh (unchged)
Steve Mandel 2,010,000 sh (unchged)
Bruce Berkowitz 26,598,848 sh (-5.69%)
Murray Stahl 2,568,104 sh (-17.94%)
Jim Simons 60,800 sh (-39.08%)
» More
» Details

Insider Trades

Latest Guru Trades with NAS:SHLD

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Business Description

Industry: Retail - Apparel & Specialty » Department Stores
Compare:JSE:MSM, SZSE:002419, SHSE:601010, SZSE:000501, SHSE:600859, TSE:9956 » details
Traded in other countries:SEE.Germany,
Sears Holdings Corp along with its subsidiaries is an integrated retailer with full-line and specialty retail stores in the United States, operating through Kmart and Sears.

Sears Holdings Corp was incorporated in the State of the State of Delaware on November 23, 2004 in connection with the merger of Kmart and Sears on March 24, 2005. The Company along with its subsidiaries is an integrated retailer with 1,725 full-line and specialty retail stores in the United States, operating through Kmart and Sears. The Company operates in two segments including Kmart and Sears Domestic. The Kmart segment operates approximately a total of 979 Kmart stores across 49 states, Guam, Puerto Rico and the U.S. Virgin Islands. Its store count consists of 968 discount stores, and 11 Super Centers. Its stores are one-floor, free-standing units that carry products across categories, including consumer electronics, seasonal merchandise, outdoor living, toys, lawn and garden equipment, food and consumables and apparel, including products sold under such well-known labels as Jaclyn Smith, Joe Boxer and Alphaline, and certain proprietary Sears brand products (such as Kenmore, Craftsman and DieHard) and services. It also offers appliances, including Kenmore-branded products. The Sears Domestic segment consists operations of Full-line Stores, Specialty Stores, Commercial Sales, and Home Services. It operates 717 stores, of which 709 are Full-line stores located across all 50 states and Puerto Rico. Its Full-line stores offer products and service offerings across merchandise categories, including appliances, consumer electronics/connected solutions, tools, sporting goods, outdoor living, lawn and garden equipment, certain automotive services and products, such as tires and batteries, home fashion products, as well as apparel, footwear, jewelry and accessories for the whole family. Its product offerings include Kenmore, Craftsman, DieHard, Covington, Canyon River Blues, Metaphor, Outdoor Life, Structure and Apostrophe brand merchandise, and other brand merchandise such as Roadhandler, Ty Pennington Style and Alphaline. Lands' End, Inc. It also operated 8 Sears Essentials/Grand stores located in 8 states. It also operates 29 specialty stores located in free-standing, off-mall locations or high-traffic neighborhood shopping centers. Its Commercial Sales operations sells Sears merchandise, parts and services to commercial customers through its business-to-business Sears Commercial Sales and Appliance Builder/Distributor businesses. Its Sears Commercial Sales provides appliances and services to commercial customers in the single-family residential construction/remodel, property management, multi-family new construction, and government/military sectors; and Appliance Builder/Distributor business offers premium appliance and plumbing fixtures to architects, designers, and new construction or remodeling customers, and is currently operating in 10 markets with 17 facilities. It also provides home services, with approximately more than 13 million service and installation calls made annually. It operates websites under the sears.com and kma

Guru Investment Theses on Sears Holdings Corp

Francis Chou Comments on Sears Holdings Corp - May 23, 2016

In July 2015, Sears Holdings Corporation (NASDAQ:SHLD) announced that it had closed its rights offering and sale-leaseback transactions with Seritage Growth Properties (“Seritage”), a recently formed, independent, publicly traded real estate investment trust (“REIT”).

In the transaction, Sears sold 235 Sears- and Kmart-branded stores to Seritage along with Sears’ 50 percent interests in joint ventures with each of Simon Property Group, Inc., General Growth Properties, Inc. and The Macerich Company, which together, hold an additional 31 Sears Holdings properties. Based on our rough estimate, this represented less than 25% of the company’s real estate assets.

Sears Holdings received aggregate gross proceeds from the transaction of $2.7 billion, which provides the Company with enhanced financial flexibility to accelerate investments in its transformation to an asset-light, member-centric, integrated retailer.

However, from our perspective, the most important thing that happened was that Seritage is now a public company and when its stock trades daily, we have a more reliable way of assessing the real estate value in SHLD indirectly. We also know that pre-Seritage and post-Seritage, the profile and the quality of the properties held in Seritage and SHLD is roughly the same.

At the current price of $15 for Sears, the company is being priced in the market for about $1.5 billion. Even if you include the debt of roughly $3 billion, we believe that the price of Sears is severely underpriced.

However, the comparison is not apples to apples. Seritage is a clean real estate company whereas SHLD has some serious problems with its retail operations. As every day goes by, the losses from operations are eroding the value of SHLD that comes from its real estate and brand names. Those brand names such as Kenmore, Craftsman and Diehard, we believe collectively could be worth as much as $3 billion. The transformation from the bricks-and-mortar business to their member-centric Shop Your Way (www.shopyourway.com) is happening; whether it is going to be successful or not is another story. These types of ventures should be classified as “venture capitals” and in spite of all the positive spins written about the transformation, it is still a hit or miss affair. Still, netting out all the negatives and all the losses from operations, we believe that the intrinsic value of Sears is far above the current price of $15.

From Francis Chou (Trades, Portfolio)'s 2015 annual shareholder letter.

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Bruce Berkowitz Comments on Sears - May 20, 2016

Daniel Schmerin: Let’s move on, we received the most questions about Sears (NASDAQ:SHLD).





How do you evaluate your investment in Sears today?





Bruce Berkowitz (Trades, Portfolio): Our thesis on Sears cannot be disproven: Sears has a vast real estate empire complemented by unique businesses. Sears also has constraints, and we understand those constraints. As part of our investment process, we developed progress checklists concerning Sears’ fixed obligations, balance sheet strength, footprint, pension fund obligations, the repurposing of real estate, and spinning off companies that would benefit from independence. We thought about all of the possibilities and the potential.





We do understand today that the retail world is morphing, and we understand the challenge of optimizing a huge set of company assets subject to those constraints. On our checklist the two remaining issues are pension fund obligations and retailing losses. The first, the pension fund obligation, should improve over time, especially with higher interest rates. The other remaining issue, the retail losses, is, in our opinion, voluntary, and is expected to stop this year.





Daniel Schmerin: We received several questions about the mistakes that Sears has made over the years, and the impact that those mistakes have had on our investment.





What are you views?





Bruce Berkowitz (Trades, Portfolio): Dan, nobody is perfect, and in hindsight it’s easy. Yes, Sears bought back stock too high. Yes, I was way, way too early in buying Sears stock for our shareholders. Yes, Sears’ pension obligation has been a larger consumer of cash than I anticipated, due in part to the prolonged low interest rate environment. I did not predict that the pension fund would chew up $2 billion of cash in recent years, which as of today is more than the entire market cap of the company.





Yes, these have been unforced errors that have caused a delay of game. It is taking longer than I thought to maximize and monetize the enormous asset base under the Sears umbrella than we would have expected, but it is happening. Last year’s spin-off of 266 properties to a newly formed real estate investment trust called Seritage is proof positive. And the nearly $32 of distributions that shareholders have received from other Sears corporate actions serves as additional proof.



Daniel Schmerin: Is it fathomable that the market is missing the huge gap between Sears’ current stock price and our estimate of intrinsic value, which you published in our Annual Letter last month?





Bruce Berkowitz (Trades, Portfolio): It’s not just fathomable, it’s today’s reality. Our shareholders have to remember Fairholme’s success to date is precisely based on this concept that having a unique viewpoint allows us to buy companies at tremendous discounts. It wasn’t that long ago that AIG was perceived to be dead; Bank of America was perceived to be dead; the entire financial system was about to go over the cliff. We disagreed, and we invested in financial companies and helped stabilize those companies to the benefit of our shareholders, and the country recovered.

We expect the same to be true of all our current investments, including Sears. The facts tell us that we own valuable assets at historic discounts. The facts determine our confidence and willingness to stay the course. Either Sears’ price is going to climb to our assessment of intrinsic value, or we are wrong about that value and it will decline toward the current stock price. Most likely the stock price and our estimate of intrinsic value will meet somewhere in the middle of this large range of possibilities, the same way it has happened for almost every investment at Fairholme.





Daniel Schmerin: We recognize Sears has spent a considerable amount of money trying to stay competitive in a rapidly changing retail environment.





Has it been worthwhile?





Bruce Berkowitz (Trades, Portfolio): I don’t know yet. If Sears is able to return to profitability this year, which is the company’s most important focus during 2016, then yes it has been worthwhile. A considerable portion of the past cash burn is voluntary based on the transformation of the retail businesses. The remaining portion is based upon the pension and rent expenses, which will go down with time. Again, Sears has been going through this metamorphosis, and its technology spending and Shop Your Way marketing spending has been very costly. However, we expect much of the heavy lifting is over, and those expenses should decline.





Daniel Schmerin: Three shareholders asked about the recent Schedule 13D filing, and the perception that you will push for change at Sears.





So what’s the truth?





Bruce Berkowitz (Trades, Portfolio): Fairholme owns over 25% of Sears’ stock as well as various other Sears-related securities. In mid-December we filed a Schedule 13D on our Sears position. We filed on behalf of our shareholders, and it is important that I express my views to the company. In fact, I was invited to express my views to the company just last month in front of their Board of Directors. I took that opportunity to explain Fairholme’s investment perspective on the company as a whole, as well as its various business units.

This included our view regarding the need to preserve the enormous value of its assets and the imperative to promptly return to profitability. I focused on the cash burn, and how the continuation of the cash burn does not build confidence or trust among all of Sears’ constituents – I’m talking about Sears’ customers, vendors, suppliers, employees, creditors, and investors.





I also discussed my belief that eliminating the cash burn will do more to optimize the value of Sears’ assets than any other action. I also shared my view for Sears to help shareholders better understand the company’s assets and strategies by giving them more information. The bottom line is not everyone has the ability to spend as much time studying Sears as we do. Most people only focus on stock price, and while it is wrong, it is human nature. I recognize that much of what Sears’ management has written has proven true. I recognize that most do not understand the vast asset base at Sears, and I recognize that most do not understand the complexity of optimizing all of the assets. More information and a little more hand holding may be helpful – it sure won’t hurt.





I must tell you after I gave my thoughts to the Board and left, I did not sense any disagreement among the Board with any of the points that I raised. I left feeling that we were squarely on the same page. I clearly believe that they know what to do and my views were not revolutionary at all. Also, it is important to note that as I left, there appeared to be an appropriate sense of urgency for these matters.

From Bruce Berkowitz (Trades, Portfolio)'s Feb. 23, 2016, Fairholme Fund (Trades, Portfolio) conference call.

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Bruce Berkowitz Comments on Sears Holdings Corp - Feb 03, 2016

Sears Holdings Corporation (“Sears”) (NASDAQ:SHLD) common stock, warrants, and bonds comprise 13.2% of Fund assets. Our ongoing valuation work reinforces our longstanding belief that Sears is worth multiples of its current market price (as evidenced in the chart below), largely based on its vast real estate empire and disparate businesses confi gured to sell, deliver, connect, control, service, and replace all manner of consumer products. Throughout the year, the Fund took advantage of price declines to increase its stake.

Last year’s sale of 266 properties for $3.1 billion unlocked one-fourth of the company’s real estate square footage. The properties included in the transaction were not exclusively the crème de la crème of the company’s real estate portfolio as many have falsely asserted. Instead, the quality of the properties included in the transaction closely mirrors the approximately 170 million square feet of real estate retained by Sears today as depicted in the following chart.

Proceeds from the sale were used to reduce corporate debt by $936 million, and the company must now accelerate its return to profi tability in order to rebuild confi dence with customers, creditors, vendors, employees, and other investors. Doing so should enable Sears to optimize the value of all its assets.



From Bruce Berkowitz (Trades, Portfolio)'s 2015 Annual Letter for the Fairholme Allocation Fund.

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Bruce Berkowitz Comments on Sears Holdings Corp - Feb 03, 2016

Sears Holdings Corporation (“Sears”) (NASDAQ:SHLD) common stock, warrants, and bonds comprise 13.2% of Fund assets. Our ongoing valuation work reinforces our longstanding belief that Sears is worth multiples of its current market price (as evidenced in the chart below), largely based on its vast real estate empire and disparate businesses confi gured to sell, deliver, connect, control, service, and replace all manner of consumer products. Throughout the year, the Fund took advantage of price declines to increase its stake.

Last year’s sale of 266 properties for $3.1 billion unlocked one-fourth of the company’s real estate square footage. The properties included in the transaction were not exclusively the crème de la crème of the company’s real estate portfolio as many have falsely asserted. Instead, the quality of the properties included in the transaction closely mirrors the approximately 170 million square feet of real estate retained by Sears today as depicted in the following chart.

Proceeds from the sale were used to reduce corporate debt by $936 million, and the company must now accelerate its return to profi tability in order to rebuild confi dence with customers, creditors, vendors, employees, and other investors. Doing so should enable Sears to optimize the value of all its assets.

From Bruce Berkowitz (Trades, Portfolio)'s 2015 Annual Letter for the Fairholme Fund.

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Francis Chou Comments on Sears Holdings Corp - Mar 31, 2015

As we have indicated before, we believe that Sears Holdings (SHLD) is a misunderstood story. There are many moving parts but we believe Sears Holdings’ intrinsic value lies in its real estate assets. It also has other valuable assets such as Kenmore, Craftsman and Diehard. Being a traditional department store has become a tough business during the last decade but, according to management, Sears is transitioning its historic focus on running a brick and mortar department store into a business that provides and delivers value by serving its members in the manner most convenient for them: whether in store, at home or through digital devices.

The value of its real estate allows Eddie Lampert, the controlling shareholder and CEO, the time and money to effect the changes. What Lampert is doing is the right thing to do, considering the possible outcomes – if it works, it’ll be a multi-bagger; if the transformation does not work out as expected, we believe the real estate values are high enough that we would not lose money in our investment at current prices after netting out all liabilities. If real estate was the only play from Lampert’s viewpoint, it seems that he would have liquidated the company a long time ago.

Caveat Emptor: With Sears announcing the REIT plans for part of their real estate holdings, which could be effected by the end of this year, those who bought Sears on the basis of that if the retail operations do not pan out, the value is covered by its real estate - that kind of reasoning will be less valid than before.

So, after the REIT transaction, you will be betting more on Sears' retail transformation, ostensibly called as 'SHOPYOURWAY'. If it doesn't work out, Lampert will be called 'LOSTYOURWAY', and so will be the investors who are still holding the stock.

The various bonds and debentures in Sears will also have less coverage than before. Lampert was smart enough to structure the debt in such a manner that if parts of Sears were spun off directly or through rights offerings, fraudulent conveyance laws wouldn't come into play.

Some of the debt like the one at Sears, Roebuck and Acceptance Corp. (SRAC) are guaranteed by Sears Holdings, but the assets of Lands' End, Sears Hometown and Sears Canada have flown the coop. On some of these transactions, Sears did receive the cash, and that may mitigate the argument of fraudulent conveyance laws. Unfortunately, the level at which cash is being consumed is unacceptable and if the transformation does not happen soon enough or is not sufficiently successful, it may make staying invested in Sears a highly risky investment, despite its vast real estate holdings.

There is one unusual quirk in the latest bond issuance with a coupon of 8%, maturing in 2019. It looks junior to the SRAC bonds but it gives the warrant holder the right to use this 8% bonds at 100 cents on a dollar to buy Sears Holdings stock at $28.41 per share. No wonder it is trading at 96 cents on a dollar versus 60 cents on a dollar for the SRAC bonds.

From Francis Chou (Trades, Portfolio)’s Chou Funds 2014 Annual Report.

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Bruce Berkowitz Comments on Sears Holdings Corp - Feb 10, 2015

Market participants have often failed to ascribe appropriate intrinsic value to conglomerates, and Sears Holdings Corporation (SHLD) (“SHC”, 7.1%) is no exception. For years, SHC has remained a misunderstood sum-of-parts story. Few have the inclination to examine all of the company’s pieces, which equate to a net asset value that we estimate to be multiples of current market prices.

SHC’s substantial portfolio of real estate is its most valuable component. The company’s 977 Kmart and 714 Sears properties total 195 million square feet of commercial retail space – more than Simon Property Group, the largest mall REIT with an enterprise value of $100 billion. The possibilities for SHC’s owned and leased properties are endless. Redevelopment is one feasible option that the company is actively pursuing, including: the transformation of its 162,000 square foot store at Janss Marketplace (Thousand Oaks, CA) into a mini-mall; the reorganization of a 14-acre site in St. Paul, Minnesota, with 111,000 square feet in adjacent structures including 130 units of housing; and the redevelopment of a 12.3-acre property at top-performing Aventura Mall in Florida into 251,250 square feet of high- end open-air retail and restaurant space, 43,802 square feet of office space, 128,737 square feet for a luxury hotel with 120 rooms, and 476,297 square feet of parking. At this proposed “Esplanade at Aventura,” Sears would retain a 20,000 square foot presence, effectively reducing its footprint by 90%. Subleasing to single and multiple tenants is another option: millions of square feet have already been subleased to tenants such as Ansar Gallery International, Dick’s Sporting Goods, Kroger, Nordstrom Rack, Primark, and Whole Foods. Finally, some stores will remain as-is: for example, “cash cow” locations throughout the Northeast corridor, Puerto Rico, and the U.S. Virgin Islands do not require any reconfiguration.

We believe that the company’s non-real estate assets have significant value as well. SHC’s $5.6 billion in cash, receivables, and net inventory (or $44 per diluted SHC common share), leading brands (e.g., Kenmore, Craftsman, and DieHard), and Shop Your Way loyalty program (which has helped the company generate $4 billion in online sales) are important components. SHC also operates 750+ pharmacies with $1.75 billion in annual sales. Sears Home Services is the largest national delivery and home repair service with over $2.5 billion in sales. Annual service repair calls exceed nine million, in addition to 4 million deliveries and 1 million installations. Sears Commerce Services provides e-commerce and logistics solutions for third-party businesses, akin to Amazon Services. Sears Logistics has 49 distribution and fulfillment facilities across the U.S. (46.5 million square feet) providing end-to-end supply chain solutions for SHC and competitors. Sears Protection Company has over 15 million products under protection agreement contracts. Sears Reinsurance Company provides management of all insurance risks. And there is more.

We believe that SHC’s liabilities are easily offset by its non-real estate assets. Proceeds from recent and anticipated corporate actions as well as further inventory reductions would re-pay the: (i) $400 million in short-term debt due February 2015; (ii) $1.6 billion from the domestic credit facility expiring April 2016; (iii) $1.0 billion term loan due June 2018; and (iv) remaining pension plan obligations forecasted to be $1.1 billion through 2019 at prevailing low rates.

SHC’s management acknowledges that operating performance must improve, and we remain confident that the company has the ability to effectively address its cash burn by reducing: (i) investments in integrated retail and Shop Your Way; (ii) the dual marketing program spend; (iii) rent and associated costs; (iv) corporate overhead; and (v) the pension deficit. The company indicated that it is “currently carrying costs of two promotional programs: [Shop Your Way] Points and Promotional Markdowns (‘PMDs’)” and intends to expedite the transition from PMDs to Points for a “more efficient promotional model.” SHC is also accelerating unprofitable store closings, and can terminate approximately 80% of existing leases without penalty over the next four years by not exercising its extension options. Retail analysts predictably focus on “revenue per square foot” and “same store sales.” We prefer to ignore the crowd by assessing all the parts. Consider this: at one point last year, the market cap of newly independent Lands’ End almost rivaled the market cap of its former parent, SHC.

Form Bruce Berkowitz (Trades, Portfolio)'s Fairholme Fund 2014 Annual Report and Investor Letter.

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Bruce Berkowitz Comments on Sears Holdings Corp - Aug 04, 2014

Sears (SHLD) remains the Fund’s least successful investment, yet has the highest potential based on our estimates of tangible values.

From Bruce Berkowitz (Trades, Portfolio)'s Fairholme Fund Second Quarter 2014 Shareholder Letter.

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Top Ranked Articles about Sears Holdings Corp

Francis Chou Comments on Sears Holdings Corp Guru stock highlight
In July 2015, Sears Holdings Corporation (NASDAQ:SHLD) announced that it had closed its rights offering and sale-leaseback transactions with Seritage Growth Properties (“Seritage”), a recently formed, independent, publicly traded real estate investment trust (“REIT”). Read more...
Bruce Berkowitz Comments on Sears Guru stock highlight
Daniel Schmerin: Let’s move on, we received the most questions about Sears (NASDAQ:SHLD). Read more...
Fairholme Fund Sells Bank of America, Leucadia National Fund's top trades during the 1st quarter
Fairholme Fund (Trades, Portfolio) is managed by its founder Bruce Berkowitz (Trades, Portfolio). For the 10-year period after inception in 1999, the fund gained 253% while the Standard & Poor's lost money. During the first quarter the fund traded some stocks as follows: Read more...
Sears Holdings to Close 78 Kmart, Sears Stores Shutdowns to be completed by mid-September
Sears Holdings (NASDAQ:SHLD), the Hoffman Estates, Illinois-based owner of retail store brands Sears and Kmart, announced Thursday that it will close 78 stores – 68 Kmart stores in 26 states and 10 Sears stores in eight states – in the next five months. Read more...
CEO and 10% Owner of Sears Holdings Invests in Company Edward Lampert buys 57,261 shares
Edward Lampert (Trades, Portfolio) (Insider Trades), CEO and 10% owner of Sears Holdings Corp. (SHLD), bought 57,261 shares of the company on April 11. The average price per share was $14.34, for a total transaction of $821,123. Read more...
Berkowitz Sells More Shares of Sears Holdings Guru's sale exceeds buy he made a week earlier
Not quite a week after making his first investment of the year in Sears Holdings (NASDAQ:SHLD), Bruce Berkowitz (Trades, Portfolio) resumed selling shares in the Hoffman Estates, Illinois-based holding company. Read more...
Berkowitz Makes 1st Purchase of Year in Sears Holdings Guru had reduced stake 9 times since 2016 began
The day after GuruFocus contributor Jonathan Poland wrote about the value of Sears’ (NASDAQ:SHLD) real estate holdings – in the context of Sears CEO Edward Lampert’s recent acquisition of part of the company’s $750 million loan – guru Bruce Berkowitz (Trades, Portfolio) raised his stake in the company by 0.06%. Read more...
Fairholme Fund Cuts Bank of America, Buys Lands' End Fund invests in NOW, MRC Global, Leucadia National
Fairholme Fund (Trades, Portfolio) is managed by its founder, Bruce Berkowitz (Trades, Portfolio). In the 10-year period after inception in 1999, the fund gained 253% while the Standard & Poor's lost money. During the fourth quarter Berkowitz traded many stocks. Read more...
Bruce Berkowitz Shows New Stock Positions for Q4 Two are from oil industry
Bruce Berkowitz (Trades, Portfolio) released his fourth-quarter letter and portfolio update Wednesday, reporting he purchased three new stocks. Read more...
Bruce Berkowitz Comments on Sears Holdings Corp Guru stock highlight
Sears Holdings Corporation (“Sears”) (NASDAQ:SHLD) common stock, warrants, and bonds comprise 13.2% of Fund assets. Our ongoing valuation work reinforces our longstanding belief that Sears is worth multiples of its current market price (as evidenced in the chart below), largely based on its vast real estate empire and disparate businesses confi gured to sell, deliver, connect, control, service, and replace all manner of consumer products. Throughout the year, the Fund took advantage of price declines to increase its stake.

Last year’s sale of 266 properties for $3.1 billion unlocked one-fourth of the company’s real estate square footage. The properties included in the transaction were not exclusively the crème de la crème of the company’s real estate portfolio as many have falsely asserted. Instead, the quality of the properties included in the transaction closely mirrors the approximately 170 million square feet of real estate retained by Sears today as Read more...

Ratios

vs
industry
vs
history
P/S 0.05
SHLD's P/S is ranked higher than
98% of the 989 Companies
in the Global Department Stores industry.

( Industry Median: 0.64 vs. SHLD: 0.05 )
Ranked among companies with meaningful P/S only.
SHLD' s P/S Range Over the Past 10 Years
Min: 0.05  Med: 0.13 Max: 0.48
Current: 0.05
0.05
0.48
Current Ratio 1.11
SHLD's Current Ratio is ranked lower than
73% of the 896 Companies
in the Global Department Stores industry.

( Industry Median: 1.56 vs. SHLD: 1.11 )
Ranked among companies with meaningful Current Ratio only.
SHLD' s Current Ratio Range Over the Past 10 Years
Min: 1.05  Med: 1.34 Max: 3.62
Current: 1.11
1.05
3.62
Quick Ratio 0.16
SHLD's Quick Ratio is ranked lower than
97% of the 896 Companies
in the Global Department Stores industry.

( Industry Median: 0.85 vs. SHLD: 0.16 )
Ranked among companies with meaningful Quick Ratio only.
SHLD' s Quick Ratio Range Over the Past 10 Years
Min: 0.16  Med: 0.30 Max: 2.05
Current: 0.16
0.16
2.05
Days Inventory 99.69
SHLD's Days Inventory is ranked lower than
56% of the 894 Companies
in the Global Department Stores industry.

( Industry Median: 89.58 vs. SHLD: 99.69 )
Ranked among companies with meaningful Days Inventory only.
SHLD' s Days Inventory Range Over the Past 10 Years
Min: 90.89  Med: 99.12 Max: 102.46
Current: 99.69
90.89
102.46
Days Sales Outstanding 6.08
SHLD's Days Sales Outstanding is ranked higher than
65% of the 727 Companies
in the Global Department Stores industry.

( Industry Median: 12.94 vs. SHLD: 6.08 )
Ranked among companies with meaningful Days Sales Outstanding only.
SHLD' s Days Sales Outstanding Range Over the Past 10 Years
Min: 5.02  Med: 5.81 Max: 6.55
Current: 6.08
5.02
6.55
Days Payable 29.71
SHLD's Days Payable is ranked lower than
77% of the 715 Companies
in the Global Department Stores industry.

( Industry Median: 49.39 vs. SHLD: 29.71 )
Ranked among companies with meaningful Days Payable only.
SHLD' s Days Payable Range Over the Past 10 Years
Min: 24.6  Med: 33.77 Max: 38.25
Current: 29.71
24.6
38.25

Valuation & Return

vs
industry
vs
history
Price/Median PS Value 0.39
SHLD's Price/Median PS Value is ranked higher than
92% of the 868 Companies
in the Global Department Stores industry.

( Industry Median: 0.96 vs. SHLD: 0.39 )
Ranked among companies with meaningful Price/Median PS Value only.
SHLD' s Price/Median PS Value Range Over the Past 10 Years
Min: 0.56  Med: 0.98 Max: 2.91
Current: 0.39
0.56
2.91
Earnings Yield (Greenblatt) (%) -25.92
SHLD's Earnings Yield (Greenblatt) (%) is ranked lower than
94% of the 1013 Companies
in the Global Department Stores industry.

( Industry Median: 5.80 vs. SHLD: -25.92 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) (%) only.
SHLD' s Earnings Yield (Greenblatt) (%) Range Over the Past 10 Years
Min: -25.92  Med: 8.70 Max: 17.8
Current: -25.92
-25.92
17.8
Forward Rate of Return (Yacktman) (%) -6.74
SHLD's Forward Rate of Return (Yacktman) (%) is ranked lower than
73% of the 513 Companies
in the Global Department Stores industry.

( Industry Median: 4.83 vs. SHLD: -6.74 )
Ranked among companies with meaningful Forward Rate of Return (Yacktman) (%) only.
SHLD' s Forward Rate of Return (Yacktman) (%) Range Over the Past 10 Years
Min: -20.6  Med: -2.00 Max: 37.6
Current: -6.74
-20.6
37.6

More Statistics

Revenue (TTM) (Mil) $25,146
EPS (TTM) $ -10.70
Beta1.91
Short Percentage of Float53.60%
52-Week Range $10.52 - 44.72
Shares Outstanding (Mil)106.77
» More Articles for SHLD

Headlines

Articles On GuruFocus.com
Francis Chou Comments on Sears Holdings Corp May 23 2016 
Bruce Berkowitz Buys Bank of America, Sells Leucadia National May 23 2016 
Edward Lampert Reduces 3 Stakes in 1st Quarter May 22 2016 
Bruce Berkowitz Comments on Sears May 20 2016 
Chou Associates Fund 2015 Annual Investor Letter May 15 2016 
Fairholme Fund Sells Bank of America, Leucadia National May 02 2016 
Is JCPenney's Rally About to Take an Ugly Turn? Apr 28 2016 
Sears Holdings to Close 78 Kmart, Sears Stores Apr 22 2016 
CEO and 10% Owner of Sears Holdings Invests in Company Apr 15 2016 
Berkowitz Sells More Shares of Sears Holdings Apr 11 2016 

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