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
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