US Sears Holding with mixed success

US Sears Holding with mixed success

Sears, the US retailing group reported on February 27, 2014 that it same store sales were falling 6.4 % in the fiscal quarter ending February 1. At the same time a loss of USD 3.37 (USD 4.61) a share, both were definitely not exactly good news, but Sears claimed that its sales were higher in February 2014

On February 28 these communicated news let shares increase 6.5 %, however Sears shares are highly volatile, over the past year they registered 29 one-day swings in excess of 5 %, meaning that its share price has been about three times as shaky as shares of competitor Target over the past three months. This says something, given that Target was rocked by revelations of data breach during this period. Also a handful of other retail stocks have a sort of a option like characteristic. J.C. Penney saw its share shoot up 25 % on February 27, after reporting a slight profit in its latest quarter.

Sears shares are rather scarce for trading, because of the 106 million shares outstanding, Sears Chairman Edward Lampert, directly, or through his hedge fund controls 53 million shears. Another 24 million shares are owned by Fairholme Capital Management, the hedge fund run by Bruce Berkowitz, thus fluctuations of share prices are affected already by smaller market transactions. With the result, that Sears stock has become less a thing to invest in, but rather a thing to trade, including plenty of inherent risk. Sears continue to lose money, and the underlying value of its assets remains uncertain. Only aggressively risk accepting investors should buy such a stock.  

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