Sears Canada (SCC.TO) Buy, Sell or Hold

Sears Canada (SCC.TO)

0.00

-0.00 (0.00%)

4 watching

WAIT

The US parent is looking to take over outstanding shares. This was inevitable. If you own, wait until the committee decides if it is a good value. The department store business is a bad business to be in.

SELL

Going through a big change because of its partner in the US. They have stripped the balance sheet of cash.

DON'T BUY

Sold its credit card holdings which was its major driver of profit. Now that this is gone, it is not expected that they will do that well with retailing goods.

SELL

Will be paying a special dividend. As soon as the dividend is paid, the stock will go x-dividend and drop at least as mush as what the dividend would have been. Have sold off their finance unit and so is now just a department store that hasn't been that well run.

SELL

To use the proceeds from the sale of their credit card business to issue a special dividend. Would sell the shares as he believes tax treatment will be better on the capital gains than on the special dividend. (If you are in an RRSP, it will make no difference.)

HOLD

Took a big jump on their sale of their credit and financial services. The danger when you have a big huge jump, is whether or not it's a true move. If you own, you should take some profit.

DON'T BUY

Up over 47% over the last year. Will either be taken over by its US parent or they will sell it off to a 3rd party. Have sold off their credit card operation. Most of the good news has already been priced into the stock.

DON'T BUY

Market has priced the fundamentals correctly based on her valuations and assuming they sell their credit card division. The question is, will Sears US buy the company. Can't see much upside.

HOLD

Has a model price of $22.66. About an 8% differential. Finding more value elsewhere, but there is value in this stock.

DON'T BUY

Retailing in Canada has been a tough nut to slug. Department stores have been losing market share. Sales have been fairly stagnant. Would rather own a Canadian Tire (CTR-T) or Reitmans (RET-T).

DON'T BUY

Would put it halfway between Canadian Tire (CTR-T) and a Hudson Bay (HBC-T). It's a little lower end than a Hudson Bay but higher than Canadian Tire and its performance is also halfway between. Not attracted to it as a retail idea. The whole department store concept is kind of tired.

DON'T BUY

Will be unexciting. The whole North American department store sector seems to be unable to gather a lot of traction. The trend seems to be towards big box retailer in the lower end of the market and towards more boutique at the higher end. This also applies to Hudson Bay (HBC-T).

SELL

It has run up soley on speculation of a takeover by Sears in the US. Have lowered their guidance, so it's overpriced relative to their peers.

DON'T BUY

The big issue with big retailers is sales. Are they going to have the right trends, too much inventory. When you start seeing big discounts, end of season sales, it indicates too much merchandise left over. With margins of only 10%, it can have a big impact. Trading at 14 X earnings.

DON'T BUY

If a retailer can't perform well coming into the Christmas season, you have to be very careful.

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Sears Canada (SCC.TO)