1-Star Stocks Poised to Plunge: Sears Holdings?

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 (NAS: SHLD) has received the dreaded one-star ranking.

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


Headquarters (founded)Hoffman Estates, Ill. (1899)
Market Cap$6.3 billion
IndustryDepartment stores
Trailing-12-Month Revenue$41.6 billion
ManagementChairman Edward Lampert
President/CEO Louis D'Ambrosio
Return on Equity (average, past 3 years)(14.6%)
Cash/Debt$747.0 million / $3.5 billion
CompetitorsJ.C. Penney
Wal-Mart Stores

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

On CAPS, 37% of the 2,334 members who have rated Sears believe the stock will underperform the S&P 500 going forward.

A couple of months ago, one of those Fools, Reesetricted, succinctly summed up the bear case for our community:

Sears is a dog. They cant make a profit because they are not a "go-to" for anything in particular. Since they don't specialize, they compete with giants ... not to mention other mall/clothing retailers, as well as the more sector specific outlets. Their business model is tantamount to a more expensive [Wal-Mart] with less selection. Sears ... you fail. Short term and long. Selling your stores is a good move, however you have fallen short. Liquidation is the right move. See you in the pink.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Wal-Mart. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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