Sears shares see mysterious drop
The has-been retailer will report its monthly sales numbers Thursday. Are traders bracing for bad news?
Updated 4:20 p.m. ETWhy are shares of Sears Holdings (SHLD) down?
The stock fell nearly 9% Wednesday afternoon, but there wasn't an apparent reason. Other retailers were seeing smaller sell-offs -- Kohl's (KSS) fell 3.6%, and JC Penney (JCP) closed down 3.5% after it changed its promotions strategy.
Sears has been in an intense drop from mid-March, when it topped $83 a share. By early afternoon, trading volume was already at 1.6 million, higher than the daily average of 1.36 million. The stock closed Wednesday at $52.34.
One StockTwits contributor noted that the stock was approaching a death cross -- where the short-term moving average was falling below the long-term moving average. "SHLD should hit high $40s soon," wrote the contributor, the financial analysis company The Oxen Group.
Sears is expected to report its monthly sales numbers Thursday, so the drop may be in anticipation of bad news.
Analysts are down on the stock, with five giving it an "underperform" rating, one giving it a "hold" and one calling it a "strong buy."
Sears is in the middle of an ongoing restructuring effort. The company reported a first-quarter profit earlier this month, but that was accomplished only through the sale of stores. Same-store sales were down 1% at Sears stores and 1.6% at Kmart stores, which Sears also owns.
In the past Sears had everything for everyone. With specialty stores like Home Depot and Best Buy, there isn't any reason to shop at Sears anymore. Today Sears looks like five acres of clothes with one salesperson to help you find things and ring you up, not to mention giving you a five minute speech as to why you should open a Sears Mastercard account.
Sears went down hill about ten years ago, when they started centralizing services, such as the credit department and cutting the sales staff in half. There was a time you could talk to a person face to face about a credit issue, not any more.
Sears lost it way, and lost a great many of it customers. It appears to be a ship without a rudder.
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