Once one of the most prominent retailers in America, Sears has filed for bankruptcy. Naturally, Sears stock plummeted in response to the news, tumbling 23% in early Monday trading to fall to $0.31 per share. That’s right—Sears Holdings (SHLD) is now a penny stock, with a market capitalization of a mere $34 million.
As a company and a stock, Sears Holdings is pretty much dead. Sad. Growing up in Richmond, Virginia, I remember my Mom taking me and my sister to Sears frequently—the towering Sears store was front and center at the local Regency Square mall, its bright blue and white letters big enough to be seen from the highway.
Now, living in Vermont, the only Sears that I know of is located at the back of the nearby Blue Mall, so small and tucked away that it’s as if the mall owners are almost embarrassed it’s still there. I’m sure it won’t be there much longer.
Sears isn’t alone, of course. Macy’s (M), J.C. Penney (JCP) and Dillard’s (DDS) are other examples of department stores that have fallen victim to the Amazon-driven online retail revolution—and their stocks have nosedived accordingly.
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Sears Stock Demise Timeline
But none of those retail stocks have lost virtually all of their value the way Sears stock has. To truly demonstrate how far SHLD has fallen, here’s a timeline that dates back to 2007, followed by a very ugly chart:
April 2007: Sears stock hits an all-time high of 144, peaking at a value of more than $23 billion. At the time, it was up 1,179% in the four years since SHLD debuted on the Nasdaq, in 2003.
November 2008: SHLD mercifully finds a bottom at 22, after a year-and-a-half freefall in the throes of the Great Recession.
April 2010: SHLD stock is back up to 92, thanks in part to a 373% earnings per share improvement in 2009. Sears hasn’t grown annual profits since.
January 2012: Back down Sears stock goes, re-testing multi-year support at 22 on the heels of a year in which the company failed to grow sales or earnings.
May 2015: SHLD dips below 22 for the first time in more than a decade, as the company continues to shutter stores across the country.
December 2016: Sears stock dips below 10 per share for the first time after Black Friday sales disappoint yet again.
September 2018: SHLD falls to less than one dollar per share. It’s been in steep decline in the two weeks since. By the time you read this, it might be at zero.
There’s no real moral to this story, other than to avoid department store stocks, which I’m sure you already knew. Brick-and-mortar retailers as a whole aren’t dead—in fact, there are plenty of good investment opportunities in dollar store stocks like Five Below (FIVE) and Dollar Tree (DLTR).
At the moment however, very few stocks are holding up well, thanks to last week’s mini-market crash. To know which stocks have actually maintained momentum amid the downturn, I highly recommend subscribing to our Cabot Top Ten Trader investment advisory, where every week Mike Cintolo recommends the market’s 10 hottest stocks. For more information, click here.
In the meantime…R.I.P Sears.
Timothy Lutts heads one of America’s most respected independent investment advisory services. Each week, Tim personally picks the single best stock in his exclusive Cabot Stock of the Week advisory. Build your wealth and reduce your risk with the top stock each week for current market conditionsLearn More