Sears Holdings Corp (SHLD) Forecasts Positive Financial Developments In Second Quarter Earnings Preview

The shares of Sears Holdings Corp (NASDAQ:SHLD) have declined 35.79% year-to-date including today’s plunge. Smart Money held a positive outlook on the retailer at the end of the first quarter, with 22 hedge funds owning $2.92 billion in the company against the previous quarter investment of $2.53 billion. The value of the aggregate investment grew significantly because of the growth in Sears’ share price amounting to 25.47% during the first quarter. At the end of the first quarter, Edward Lampert’s ESL Investments was the largest shareholder of the company with 26.44 million shares valued at $1.09 billion. Murray Stahl’s Horizon Asset Management and Robert Jaffe’s Force Capital were among other main shareholders of the company at the end of the first quarter.

Considering the current financial volatility within the company and the market alike, we would recommend investors to wait until the financial results and start a position afterwards only.

We don’t just track the latest moves of funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research, with backtests for the period between 1999 and 2012 and forward testing for the last 2.5 years. The results of our analysis show that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests. Moreover, since the beginning of forward testing in August 2012, the strategy worked brilliantly, outperforming the market every year and returning 123%, which is more than 60 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).

Disclosure: none