Here’s What’s Pushing Sears Stock Through the Roof

Sears Holdings Corp.’s (NASDAQ:SHLD) plan to spin off some of its operations into Sears Hometown and Outlet Stores Inc. has boosted the company’s performance, as stock jumped over 16 percent in regular trading on Tuesday. Shortly after the opening bell, 1.8 million shares had already traded, compared with a norm of 1.5 million shares in a full day.

The company, which has led the S&P 500 since the end of 2011, saw growth of more than 69 percent between December 30 and the end of April. Its closest competitors on the S&P are Fossil (NASDAQ:FOSL), which has gained 64.7 percent, and (NASDAQ:PCLN), which is up 62.7 percent.

After posting its biggest quarterly loss in nearly a decade on February 23, Sears announced plans to spin off its Hometown and Outlet stores to raise $400 million to $500 million. In a filing yesterday with the U.S. Securities and Exchange Commission, Sears said the business, which will be spun off through a rights offering in the third quarter, will trade on the Nasdaq under the ticker symbol “SHOS.”

The new company will be made up of 944 Hometown stores and 96 Sears Hardware stores, which are smaller in format than full-line Sears stores. The Hometown and Outlet stores show “more promise” than the larger Sears stores, according to Mary Ross Gilbert, an analyst at Imperial Capital LLC in Los Angeles.