Please ensure Javascript is enabled for purposes of website accessibility

2-Star Stocks Poised to Plunge: Sears Holdings

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 8:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Market-lagging returns could be written in this 2-star.

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Sears Holdings (NASDAQ:SHLD) has received a distressing two-star ranking. While one-star stocks have been the worst performers, our data has shown that two-star stocks still lag the market by a significant margin and should be approached with caution; conversely, highly rated stocks have outperformed the S&P.

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

$5.76 Billion


Department Stores

Trailing-12-Month Revenue

$48.56 Billion


Chairman Edward Lampert

Interim CEO W. Bruce Johnson

Return on Equity (Average, Past Five Years and TTM)

15.8% and 2.8%


Wal-Mart (NYSE:WMT)

Target (NYSE:TGT)

CAPS Members Bearish on Sears Holdings Also Bearish on:

Citigroup (NYSE:C),

General Motors (NYSE:GM)

CAPS Members Bullish on Sears Also Bullish on:

Goldman Sachs (NYSE:GS),


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

On CAPS, 148 of the 390 All-Star members who have rated Sears Holdings -- some 38% -- believe the stock will underperform the S&P 500 going forward. These bears include dexion10 and Tastylunch, both of whom are ranked in the top 7% of our community.

Last week, dexion10 noted the difficulty in the stock's value proposition: "[Too] much debt and declining earnings as far as the eye can see. [Replacement] cost of their leases is higher than market cap but you'd have to find a buyer."

In a pitch just one day earlier, Tastylunch shared that bearishness and updated our community on Sears Holdings' most recent quarter:

Did they or did they not have a big earnings miss yesterday? Sure they are closing underperforming stores and hiring new execs but common their problems go way beyond that.

Seriously [Sears Holdings] has some issues, imagine Wal-Mart-ish appearance stores with no pricing advantage, poor inventory controls, unfocused brand, little marketing and management that isn't retail focused (Buffet wanna-be Eddie Lampert).

That is Sears and it ain't so great. I doubt they will go chapter 11 unless things get really really bad, but they certainly could fall further especially after yesterday's bounce.

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 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Sears Holdings and Wal-Mart are Motley Fool Inside Value picks. Google is a choice of  Rule Breakers. The Fool's disclosure policy always gets a perfect score.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sears Holdings Corporation Stock Quote
Sears Holdings Corporation
Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
$132.22 (1.85%) $2.40
Target Corporation Stock Quote
Target Corporation
$172.48 (1.70%) $2.88
Alphabet Inc. Stock Quote
Alphabet Inc.
$121.68 (2.39%) $2.84
Citigroup Inc. Stock Quote
Citigroup Inc.
$54.38 (0.70%) $0.38
The Goldman Sachs Group, Inc. Stock Quote
The Goldman Sachs Group, Inc.
$353.82 (0.61%) $2.14
General Motors Company Stock Quote
General Motors Company
$39.48 (2.65%) $1.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.