Why Sears Holdings Is Poised to Underperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, department store operator Sears Holdings (NASDAQ: SHLD  ) has received an alarming one-star ranking.

With that in mind, let's take a closer look at Sears and see what CAPS investors are saying about the stock right now.

Sears facts

   

Headquarters (founded)

Hoffman Estates, Ill. (1899)

Market Cap

$5.1 billion

Industry

Department stores

Trailing-12-Month Revenue

$40.1 billion

Management

Chairman CEO Edward Lampert

CFO Robert Schriesheim

Return on Equity (average, past 3 years)

(16.8%)

Cash/Debt

$622.0 million/$4.0 billion

Competitors

J.C. Penney (NYSE: JCP  )

Target (NYSE: TGT  )

Wal-Mart Stores (NYSE: WMT  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 36% of the 2,327 members who have rated Sears believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, TMFthump, succinctly summed up the underperform case for our community:

An unfortunate demise for this once proud brand, their retail business for both KMart and Sears is a complete mess. The best thing I can see happening to [Sears] is to spinoff the few remaining pieces of value. Craftsman and Kenmore could generate some interest, but there is little else left for the scavengers to pick at.

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