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The Company is a broadline retailer. It currently conducts its operations in three business segments: Kmart, Sears Domestic and Sears Canada.
Jockey + Patience. Depreciation is a deceiving expense for Sears because Lampert's intent is to hold incremental investment (including maintenance capex) to a much higher standard than it was when most of the company's depreciable resources were bought.
Alright, this is simple.Book Value = $75 per share.Plant, Property and Equipment = $67 per share.So is it fair to value Sears at ~$64?That is open to interpretation.
Barclays maintains an 'Equalweight' rating on Sears Holdings Price Target $70
In other words he's saving money by cutting out janitorial service and letting the stores physically collapse? That's smart. Maybe he'll begin investing in rotten fruit as well.
Depreciation is an effect of something that happened in the past. Lampert's prudent reinvestment of cash flow is important to the extent that earnings from newly invested capital do or don't deviate from historical levels of ROIC. He's not going to tear down the buildings and rebuild them when depreciation extinguishes, therefore depreciation expense is deceiving. Note that this is not an argument about the state of the business (nor is the logic alone necessarily enough to overcome the drag of a failing business).
Sears front page bull pitch is from 2010. Not a good sign.
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