Sears stockholders - Is the bloom coming off the rose?

Financial planner Andrew Horowitz, who blogs at The Disciplined Investor, takes a look at Sears Holdings‘ stock valuation and determines that the emperor’s clothes are looking rather threadbare.

The whopper:

"Until they can get a handle on the paltry margin problem (shrinking as we speak) and the realization that the land value is only good of they sell (which they are not) then there is no reason to own this stock."

Dealbreaker.com piles on.

"The logic that boosted Sears Holdings from a $50 per share company to a $200 per share was built on the value of its real estate. Lampert was said to have a plan to leverage the underlying real estate assets of Sears Holdings to make other investments, basically turning an old fashioned retailer into a twenty-first century hedge fund or private equity firm. But with consumer sentiment down and real estate deflating, the real estate to investment company play looks a lot less feasible."

I find it interesting that Sears execs have recently acknowledged the company hasn’t done a good job of tending to retail basics such as product, merchandising and marketing. That’s good news. 

The company’s got a lot of work ahead of it, certainly. But hope springs eternal.