Eddie Lampert’s ESL Sells $130M stake in Sears $SHLD, to Lampert

Eddie Lampert, founder and manager of ESL Investments, owns over 60% of Sears Holdings Corp (SHLD) between his personal portfolio and the ESL Investments portfolio. In a series of transactions earlier this week, Lampert opted to change things up a bit.

His ESL Investments sold roughly 5 million shares (see the SEC filing here). The fund sold them to Lampert himself (see that SEC filing here). The addition is worth roughly $130 million.

The New York Times posits that the move “could be a sign his hedge fund investors are dissatisfied.” SHLD lost 57.67% in 2011, and the outlook for the company isn’t good. It recently traded at $33.40 a share, down from a 52-week high of $94.79 a share. SHLD has a one year target estimate of just $22 a share. This year, its earnings dropped 480.60%. Right now the stock carries a mean recommendation of just 3.5 on a scale in which 1.0 means “Strong Buy” and 5.0 means “Sell.”

As Pershing Square’s Bill Ackman noted in his 3rd quarter investor letter: “A number of you have questioned whether our investment in JCP and our strategy for unlocking value should be compared with Sears. While many shopping malls contain both a JCP and Sears store and they are both department stores, the analogies largely stop there. Sears strategy over the last seven years appears tantamount to that of a liquidation. The company has starved the store base from needed investments and used the resulting cash flows for share buybacks at prices considerably above current market levels. Sears has had enormous turnover in the executive suite with the company’s recent CEO coming from the telecommunication industry with no retail industry expertise.” (read the letter here)