Wall Street Adds Insult to Sears Holdings Injury

Hedge fund manager Edward Lampert’s Sears Holdings Corporation (NASDAQ:SHLD) has announced plans to shutter more than 100 stores after disappointing retail sales over the holiday period drove the stock down to a new 52-week low.  The shares have traded in a 52-week range of $33.26 to $94.27, and recently traded at $33.27.

In other bad news, Goldman Sachs (NYSE:GS) cut their price target on the shares to $30 from $40. Goldman said, “The weaker fundamentals reaffirmed our view that SHLD’s weak positioning will only be exacerbated in an uncertain environment.”

Despite it the company’s woes, only one insider has sold shares recently.  Bruce W Johnson sold 2,000 shares worth $104,800, on 09/06/2011, according to SEC filings.

A number of institutional investors have liquidated their entire position in Sears shares in the third quarter. Chou Associates fund held 397,977 shares on 6/30/11, worth $28.145,717, and reported holding 0 shares on 9/30/11.  Similarly, other institutional investors also reported selling out their positions in the third quarter: King Investment Advisors, Inc. held 118,890 shares on 6/30.11, JAT Capital Management held 109,522 shares on 6/30/11, Adage Capital Partners held 65,901 shares on 6/30/11 and Sun Life Financial held 53,818 shares on 6/30/11.

This morning, Bronte Capital is out with a note on Sears further adding insult to injury. “[O]wning Sears as a property play is a demonstration of the arrogance and breathtaking naivete of much that passes on Wall Street. Sears Holdings has over 300 thousand employees. I don’t know how you successfully liquidate a business integrated with that many lives. I don’t know of anyone who has ever successfully liquidated a business with that many employees. I am not sure it can be done and it certainly can’t be done by someone with my skill-set (highly analytical, ability to spy value or value traps but no people management skill and not much tact). The idea that Sears was going to be managed/liquidated by a bunch of hedge fund guys (people like me) well – that was comical.”

Sears Competitors to Watch: J.C. Penney Company, Inc. (NYSE:JCP), Kohl’s Corporation (NYSE:KSS), Macy’s, Inc. (NYSE:M), Dillard’s, Inc. (NYSE:DDS), Best Buy (NYSE:BBY), Bed Bath & Beyond (NASDAQ:BBBY), Ross Stores (NASDAQ:ROST), The TJX Companies (NYSE:TJX), Wal-Mart Stores, Inc. (NYSE:WMT), Saks Incorporated (NYSE:SKS), The Bon-Ton Stores, Inc. (NASDAQ:BONT), Target Corporation (NYSE:TGT), Overstock.com, Inc. (NASDAQ:OSTK), and Nordstrom, Inc. (NYSE:JWN).