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Jennifer Chiou
Jennifer Chiou
Articles (195) 

Edward Lampert Invests in Sears Holdings

Company's CEO and 10% owner buys more than half a million shares

March 28, 2017 | About:

Edward Lampert (Trades, Portfolio) (Insider Trades), CEO and 10% owner of Sears Holdings Corp. (SHLD), acquired 525,936 shares on March 24. The average price per share was $7.93 for a total transaction of $4,170,672.

Sears Holdings focuses on connecting digital and physical shopping experiences such as the Shop Your Way ® platform that offers Sears and Kmart customers a social shopping experience as well as member-only rewards. The company has a market cap of $1.01 billion.

The number and volume of insider trades increased from 2014 to 2016. The number of insider purchases increased from 11 insider purchases totaling 1,309,200 shares in 2014 to 19 insider purchases amounting to 2,411,101 shares in 2016. The number of insider sells also increased from 186,043 to 2,411,101, when comparing the two years. In 2017 to date, there have been four insider purchases totaling 1,643,836 shares.

Lampert can be attributed to 525,936 of the total shares sold in 2017 to date in the aforementioned transaction. In total since 2013, Lampert purchased 3,641,586 shares of the company in 17 transactions. Fairholme Capital Management (Insider Trades), director and 10% owner of Sears Holdings, purchased 1,404,500 shares in 2017 to date. For more information about insider trades with Sears Holdings click here.

For the fiscal fourth quarter ended on Jan. 28, the company reported revenues of $6.052 billion, down from its reported $7.303 billion in revenue from the previous year's fiscal fourth quarter. Net loss also increased from $580 million to $607 million, or $5.44 per share to $5.67 per share, when comparing the same periods of time. Lampert commented that the company “delivered significant adjusted EBITDA improvement in the fourth quarter,” which is in line with the company's “firm focus on profitability to offset ongoing revenues pressures.” However, despite “building on this positive momentum,” the company is “taking decisive actions to become a more agile and competitive retailer with a clear path toward profitability.” Chief Financial Officer Jason Hollar (Insider Trades) commented that the company was “successfully improve[d] profitability through disciplined inventory and costs management” in a “challenging holiday selling season.”

The company's annual revenue and annual net income follow a decreasing trend line and decreased 12.5% and 2.7% since 2012. For more Sears Holdings financial statistics, click here.

On March 9 the company announced the closing of the sale of the Craftsman brand to Stanley Black & Decker (NYSE:SWK) for a net present value of more than $900 million. Lampert commented that the sale “provides immediate liquidity to Sears Holdings” but also allows the company to “participate in the future growth of the Craftsman brand” due to the nature of the agreement. The sale allows Stanley Black & Decker to develop, manufacture and sell Crafsman-brand products outside of Sears Holding stores, but Sears will continue to offer Craftsman products royalty-free for 15 years post-transaction close and royalty-bearing after this time.

According to GuruFocus.com, Sears Holdings has a business predictability rank of 1 out of 5 stars. For more information about business predictability rank, click here.

In March 2017, Bruce Berkowitz (Trades, Portfolio) increased his stake in Sears Holdings. Berkowitz purchased a total of 1,314,700 shares at an average per share price of $8.67 per share. In the previous quarter, Berkowitz decreased his stake in the company by 0.44%, selling 123,100 shares for an average per share price of $11.41. The total estimated gain of the holding since the initial purchase in the first quarter of 2011 is -75%. For more information about guru trades with Sears Holdings, click here.

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