Report comment

Sears is the most expensive in its peer group - by far - on a P/E basis. Since this is a fundamental analysis site, fundamenals are all I cover in the research. How crowded the trade is is a different matter.

I understand your criteria, but those criteria didn't work at on BSC, LEH, MBIA, ABK, GGP, AGO, Target, etc. - All had billionarie fund managers, big brand names, big fund ownership, seemingly undervalued assets (at least according to management and billionaire brand name investors talking their book - most of whom lost their book) and (at least the appearance of) rich cash cash flow. They still were decimated.

I am a stern disbeliever in brand name investor investing. Not to brag, but my 10 year record is much better than most brand names, and I have been taking the absolute opposite of many of them over the last two years, which has drivern big profits. I am not trying to toot my horn, I am trying to illustrate that they are flesh and blood, just like everyone else. The major difference between them and most is that they are full time professionals, but they are not fool proof. For the most part, actually, far from it.


Sears has nearly doubled, but so has many of the weakest companies in the market. Keep in mind that the entire market moved, so one shouldn't attibute a major momentum move to the fundamental attributes of a single company, unless that company didn't move. Sears produced a profit by cutting costs. Kudos to managment for that, and that is what I would look for to become more bullish on the company. The problem is that their revenue drivers are failing both on an absolute basis, and in comparison to their peers. Their profit was produced on both lower comp sales and lower aggregate revenue, if I am not mistaken. That means that they can only pull that rabbit out or their hat once, maybe twice max. Now, if they can do something about their revenue drivers, that is a different story.