2-Star Stocks Poised to Plunge: Sears Holdings?

Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Sears Holdings (Nasdaq: SHLD  ) has received a distressing two-star ranking.

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

Sears Holdings facts

Headquarters (founded)

Hoffman Estates, Ill. (1899)

Market Cap

$7.98 billion

Industry

Department stores

Trailing-12-Month (TTM) Revenue

$45.76 billion

Management

Chairman Edward Lampert
Interim CEO W. Bruce Johnson

Return on Equity (average, last five years and TTM)

8.9% and 1.4%

Four-Month Return

89%

Competitors

Wal-Mart Stores (NYSE: WMT  )
Target (NYSE: TGT  )

CAPS Members Bearish on SHLD Also Bearish on

Starbucks (Nasdaq: SBUX  )
Citigroup (NYSE: C  )

CAPS Members Bullish on SHLD Also Bullish on

Google (Nasdaq: GOOG  )
Goldman Sachs (NYSE: GS  )

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS.

Over on CAPS, 199 of the 575 All-Star members who have rated Sears Holdings -- some 35% -- believe the stock will underperform the S&P 500 going forward. These bears include jstegma, who is ranked in the top 0.3% of our community, and chop701.

Earlier this year, jstegma wrote that Sears Holdings "just doesn't seem relevant any more." Our CAPS All-Star continues: "I grew up reading the wish book and I like Craftsman tools, but it's probably been 2-3 years since I've spent any money at Sears. The wishbook and catalogue is long gone and if I am looking for tools and such I go to Lowe's."

In a more recent pitch from May, chop71 urges our community to see the bear case for themselves:

Go in to a store! The management is in the office; the salesclerks are in kiosks or stocking. There is nobody to talk to the customer except in electronics where they have no idea about the products they have on the shelf. They will read the product info off the same card the customer has available to read. My class in Navy Resale Mgmt tied to tell the Sears people they were headed down the wrong path (1987) and we were told (smugly) "we're the number one retail company in the world. What can YOU possibly tell US?" Well, they're not number one now, are they? There are several better managed outfits out there -- almost any one.

What do you think about Sears Holdings, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Sears Holdings, Wal-Mart, and Starbucks are Motley Fool Inside Value picks. Starbucks is also a Stock Advisor selection, and the Fool owns shares of it. Google is a Rule Breakers recommendation. The Fool's disclosure policy always gets a perfect score.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 01, 2009, at 5:38 PM, wolfhounds wrote:

    Four straight years of declining same store sales is not a good indication of future survival. Certainly not at the current store level.

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