Ackman Active, Except at Sears

With the news that Target (TGT) has agreed to sell $3.6 billion worth of credit card receivables to JP Morgan (JPM), one cannot help but notice he has made not a single demand from Edward Lampert at Sears holdings (SHLD). This would be the only investment in memory he has taken such a stance.

Ackman was at Sears’ annual meeting yesterday and did ask a few benign questions. According to Ackman, his 5 million share investment in Sears “is due to Eddie Lampert”.

Now some will say that Ackman has bee quiet because “he knows Lampert” or some such foolishness. Let’s be honest, you do not invest over $500 million and keep quiet if you think things are not being done properly. Last time I checked, Ackman was loath to not speak up when he thought management was not doing the proper things.

Now, some out there have claimed Lampert’s statement yesterday that Sears was “cutting costs” means he “took the late train”. The assumption must be that because he only talks to folks maybe 4 times a year that when he says something it only happens from that point on? It has not been an ongoing effort? This is just disingenuous at best and totally dishonest at worst. These are the same folks that have complained for the past two years that Lampert has “cut costs too much” at Sears and the retailer has suffered because of it. Let’s get the story straight folks. Which is it? Is he late cutting costs or has he cut them too much?

Now let’s look at it. Other retailers like JC Penny (JCP) and Macy’s (M) are taking on additional debt to get through the current environment. Target (TGT) is shedding valuable assets. Only Wal-Mart (WMT) is thriving. Sears, suffering like the rest of the industry is actually repurchasing stock and paying off debt, improving an already industry best balance sheet.

In short, Lampert is acting like a guy who is in this thing for the next few decades, not quarters.

Disclosure (“none” means no position):Long SHLD, WMT, none

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