Cramer Thinks Sears is the Beneficiary of the Fortress IPO

On tonight’s MAD MONEY on CNBC, Jim Cramer said that the biggest winner from the coming Fortress IPO is Sears Holdings (SHLD).  Here is why he thinks this: You might think of it as the retail department store, but Cramer reminds us this is a publicly traded investment vehicle that will now be more understood.  At $180 per share you might think SHLD is expensive, but to Cramer that is just a number.  The problem with Fortress coming public is that there are no comparables to use.  The street hasn’t been listening to Cramer (according to him) because they don’t have a yardstick to measure it.  SHLD can have a significantly higher stock price now that Fortress is coming public.

Fortress is coming public at 17-times earnings.  Cramer said that if Lampert loses performance and if the multiple takes a ahaircut then you can derive a $237 target comparison at SHLD.  He even noted the $371 target on the really high-end.  There are research notes saying they could raise $5 Billion in securitizations and that could take the stock to $320.00.  SHLD traded up another 1.5% to $183.66 after Cramer called it, which is actually a new all-time high.  Cramer thinks SHLD is the next Berkshire Hathaway (BRK/A).

Jon C. Ogg
February 8, 2007