Sears Needs More than Buybacks for Its Stock to Turn Around

5/29 - "Sears seems to have lost its way, which may come from the 'Department of No Kidding.' Shares are down over 50% from the 52-week high of $183.25, and shares have already recovered off of the pre-market lows. At one point a few minutes ago it looked like shares were trading at $86.00 to $87.00 after an $89.36 close yesterday. On last look shares were back up to $89.00.

It seems the time has come for Lampert to start looking at more brand financing and creative alternatives out there to unlock more value. As far as a real or pure retail story, this just isn't working."

5/29 - "Now the hysterical folks out there will screaming about a loss that ought not be all that surprising. Those of us who invest in the business, look at the balance sheet and cash position and recognize those are a solid as ever. As a mater of fact, when compared to competitors JC Penny (JCP), Kohl's (KSS), Macy's (M) and even Home Depot (HD), Sears has by far the strongest balance sheet. It also is the largest appliance retailer by FAR. Since that category currently is being hit very hard by housing, it only stands to reason that they will suffer more than the others. "

"What to do? Hold on. Maybe we get lucky and be able to get more in the mid 70's. It all comes down to your time frame. If it it years then this is just a blip on the screen and a great buying opportunity. If it is months, then you are panicking and if you invested in a big box retailer for the short term in the current environment, you should be.

It should be noted they are forecasting higher EBITDA than last year (an unusual move) and Johnson said they are going to "consider alternative investments". Something will happen, just a matter of time...'

5/29 - "The strange three-year experiment of a merged Sears and Kmart has now collided head-on with a consumer recession, and the results are ugly."

"The experiment is clearly not working. Praised by Jim Cramer, followed by Bill Ackman, Lampert has been called the next Warren Buffett. But running a retailer like a hedge fund has been a disaster. The effects of underinvestment, a lack of experienced retail executives, and the troubles with inventory control and marketing are all too evident."

"The problems are now compounded as Americans cut their spending and see no compelling reason to shop at Sears or Kmart...The reorganization is not expected to help. A former high-level Sears executive told Jesse Eisinger earlier this year that the reshuffle "makes no sense to me. There's some intellectual and economic-theory elegance to it. But the practical aspect is where it gets lost."

5/29 - "I'm buying a retail stock because I want a retailer, and not a real estate play," said Walter Todd of Greenwood Capital Associates -- which owns Sears' rivals including Lowe's Cos., Wal-Mart Stores Inc. and Costco Wholesale Corp. but has no interest in acquiring a stake in Sears.

"Sears is facing a lot of company-specific issues. They are losing market share to Wal-Mart and Costco and other discount chains. They are struggling and suffering from product mix issues," Todd said."

"There's a long way to go for Sears," said Joe Feldman of Telsey Advisory Group. "My biggest concern is if they sell Craftsman and Kenmore through other stores, it calls into question the ability of the stores to operate as a viable concern if their key differentiators can be found somewhere else. They've been big drivers of traffic."

"We see a lack of prospects for a near-term material improvement in sales and margins amid competitive pressures and weak consumer spending," said Standard & Poor's analyst Jason Asaeda."