Is Sears a Bargain Here?

With shares of Sears Holding Corporation (NASDAQ:SHLD) trading at around $43.51, is SHLD an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

What do you think of when you hear the word Sears? Do you think of an old couch sitting in the corner of your grandmother’s living room? Do you think of a bland and boring store that’s seems as though it’s waiting to die? These thought processes aren’t uncommon for people when they think of Sears, which is exactly why Sears is now desperately trying to rebrand itself. If you have seen any of their recent ads, they’re actually appealing and full of life. The bad news is that it might be too little too late. As Sears sat around relying on its name to drive sales, competitors like Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) have taken over the retail world. While not impossible, it will be extremely challenging for Sears to get back on top.

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A lot of people seem to agree considering the short percentage of the float is now up to 39.30 percent. This might be normal in the biotech sector, but it’s incredibly high for the services sector. Shorts seem to have taken their positions for good reasons. Sears currently has negative profit margins, negative operating cash flow, consistently decreasing revenue as well as 12 straight quarters of declines in Canada. No analysts have recommended a Buy, one analyst has recommended a Hold, and four analysts have recommended a Sell.

Let’s take a look at some other important numbers so we can understand the big picture a little better.