IB Net Payout Yields Model

Sears Holdings: Don't Ignore the Balance Sheet

When Sears Holdings (NASDAQ: SHLD  ) announced weak earnings after the market closed on Jan. 9, investors panicked again ignoring the facts of the company. Investors need to understand that Sears only reported the income statement numbers. If one remembers Accounting 101, the actual valuation of a company is based on the balance sheet or the assets minus the liabilities. The income level each quarter adds or subtracts from the equity on the balance sheet, but a large loss doesn't necessarily destroy assets forever. In the case of Sears, the balance sheet is littered with hidden assets that are overshadowed by these weak retail results.

Read the full article here.

Disclosure: Long SHLD. Please review the disclaimer page for more details. 


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