Along with Eddie Lampert at Sears Holding (NASDAQ: SHLD), the chairmen at Dole Foods (NYSE: DOLE) and Opko Health (NYSE: OPK) are also buying big time.
Each appears to be "busting a short" as there are significant short positions aligned against Opko Health, Dole Foods and Sears Holding. Recently, Eddie Lampert bought over $126 million worth of Sears stock. Dr. Phillip Frost, head of Opko Health, has been buying huge chunks of shares, too.
Lampert formed Sears Holding back in 2005 from the merger of Sears and K-Mart. There was speculation that he was seeking to form a Berkshire Hathaway-type vehicle to finance other acquisitions. Others speculated that he was interested in maximizing the value of Sears and K-Mart, particularly the real estate holdings.
But The Great Recession got in the way. So did competition from other retailers and on-line entities. As a result, earnings-per-share growth for Sears Holdings has 37.39% for the last five years.
Next year, earnings per share growth is projected to fall another 56.10%. Along with declining sales growth, this has understandably resulted in a short position of 9.56% for Sears Holding. A short position of 5% is considered to be troubling for a stock.
Those holding a short position have been suffering like Sears Holding shareholders over the past year, as the stock is down 9.24%. However, due in large part to the massive buying of Lampert, Sears Holding is up more than 6% for the last week of market action.