It’s easy to compare guru investor Bruce Berkowitz (Trades, Portfolio)’s holdings of Sears Holdings Corp. (SHLD, Financial) to a relationship in slow decline.
Berkowitz has sold off 7 million of the 28 million shares in the company he once headed up as a member of its board of directors. The selloff was reflected in trades during the final months of last year and early this year.
Berkowitz has reduced his stake in the company multiple times over the last year after owning, at one point, up to 30 million shares. All told, he's sold off almost 10 million shares of the company.
His loss since he started buying shares in early 2012 is a staggering 88%, according to GuruFocus.
Roughly six months ago, he held over 28 million shares of the security.
The fourth-quarter report shows he reduced his position by 11.59%, which leaves an extra 1.38% in his portfolio for another, better-performing stock.
In late trading, Sears stood at $2.64 a share, up a whopping 14.78%. Over the last 12 months, the company’s shares have dropped 64%.
GuruFocus data shows its financial strength is 4 out of 10 and its profitability and growth is rated 2 out of 10. Its price-sales ratio is 0.02.
Other indicators show an EV-to-EBIT ratio of -5.05 and an EV-to-EBITDA ratio of -8.06.
Berkowitz has been making adjustments for months. In November, he made two adjustments, after changes in October, late September and late June. In October, the company’s shares tumbled 12% after he announced he would exit the company’s board of directors. He later issued a statement saying he continued to have confidence in his investment.
Last month, Sears announced it had raised $100 million in new financing and was trying to drum up another $200 million from additional sources.
It's all part of a strategy the company is banking on to try to stay afloat and avoid a bankruptcy filing.
The plan includes an effort to renegotiate more than $1 billion in debt and identify millions in cost savings to try to return to profitability in 2018. (The cost savings does not include an earlier announcement it would shutter more than 100 Sears and Kmart stores nationwide.)
