Almost a year ago, Sears CEO
owned 2,122,707 OSH shares - today he owns about half of that. As
of March 25, 2013, Lampert reduced his position in Orchard Supply
), a Sears spinoff, for the third time since last summer. For
quarter ending June 30, 2012, the 10% owner Lampert had reduced
his position by 22.7%, then again for quarter ending Dec. 31,
2012, Lampert reduced by 29.51%. His most current trade, reducing
by 8.7%, leaves him with current shares of 1,080,204. The current
price of OSH shares is $3.97, and according to GuruFocus
analysis, is off 47% year to date.
What is going on with Orchard and its uber investor Guru Lampert,
the mastermind of the Sears makeover? Orchard Supply Hardware is
a David and Goliath story, but this time, there are many giants
to battle. Orchard competes with home improvement and hardware
heavies who have already figured out supply chain, pricing
strategy and customer options. Orchard's competitors include The
Home Depot, Ace Hardware, Costco, Wal-Mart, Target, TrueValue and
Lowe's for house paint, garden tools, and other do-it-yourself
products. Compare The Home Depot fiscal 2012 revenue of $70
billion to Orchard's fiscal 2011 revenue of $660 million.
In February 2013, Orchard Supply Hardware reported that it had
expanded its existing Senior Secured Credit Facility with Wells
Fargo Capital Finance and Bank of America N.A., increasing their
total borrowing capacity to $145.0 million through the addition
of a $17.5 million last-in-last-out supplemental term loan
tranche. Orchard also reported cash and available credit of $40
million, including $32 million available to borrow on the Senior
Secured Credit Facility. According to the GuruFocus analysis of
Orchard, the company may need that. In a recent financial and
performance checkup, GuruFocus found one major warning sign, that
the company's earnings cannot cover its interest expense. (Ben
Graham prefers a company's interest coverage to be at least 5. If
the situation continues, the company may have to issue more
debt.) A good sign is that the OSH price ($3.97) is close to a
two-year low of $3.94.
Lampert's holding history:
The bigger picture is that Sears Holding Corporation (
) announced early this month a loss of $489 million with a
six-month trend of declining sales. At that time, CEO
, also manager of ESL Investments, made two adds of SHLD, 2.91%
and 0.79% at the average price of $44.17. As the mastermind
behind the Sears makeover with the union of Sears and Kmart,
Lampert now owns 43,845,246 SHLD shares, even as OSH is sagging.
In other words, Lambert is heavily invested in his own projects
at a down time.
's SHLD Holding History
Lampert's company ESL Investments has a portfolio of 11 stocks
with a value of $3.8 billion and a quarter-over-quarter turnover
of 8%. Lampert's portfolio is heavily weighted in consumer
cyclical at 94.6%.
Lambert is 68
on the Forbes list of 400 Richest Americans.
's top buys, sells and holdings:
GuruFocus "Real Time Picks" reports the stock purchases and sales
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lag can be as short as 2 days after the date of the transaction.
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