After Chilly Earnings, Sears Hometown and Outlet Stores Inc (SHOS) Is Back on Sale

The stock remains a buy at less than $50 per share. Though I have strong conviction it is worth north of $60, an appropriate margin of safety suggests investors try to get in at this price point or lower.

Though it likely suffers from the Sears name, this company is anything but a dormant retailer. Many investors are hesitant to jump on the inexpensive department-store stock bandwagon, largely driven by real estate holdings and promises of renovations galore, but this simply isn’t one of those stories. Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) has stores ranging from Costco-esque warehouses full of appliances and mattresses (selling like hotcakes) to independently owned neighborhood hardware stores — like the Ace store you grew up with, now at better prices.

Don’t believe me? Check out the growing roster of value-investing superstars lining up behind the stock — Whitney Tilson has it as the 12th largest  position in his fund. The stock has already rewarded investors with substantial gains since its market debut late last year, but there is more to come for this temporarily beleaguered retail powerhouse.

The article After Chilly Earnings, Sears Hometown and Outlet Is Back on Sale originally appeared on Fool.com and is written by Michael Lewis.

Fool contributor Michael Lewis owns shares of Sears Hometown and Outlets. The Motley Fool has no position in any of the stocks mentioned.

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