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Actionable news in SHLD: Sears Holdings Corporation,

The Hard Facts About Sears


SHLD's last earnings report should have been bearish.

However, investors have seemingly forgotten SHLD's dire situation and the stock has rallied.

Now is an excellent time to take your profit, as SHLD historically nosedives in May.

(Source: Reuters)

In spite of a beaten down retail sector and weakening sales, Sears Holdings (NASDAQ:SHLD), which includes Kmart, sees its stock price at a relative high. The rally, which began in mid-April is not bolstered by fundamentals. Oddly enough, the rally comes on the back of news that should appear bearish to retail investors: retail sales down and mall traffic down.

The previous earnings report released by Sears should also appear bearish. Sears and Kmart comps, arguably the most important metric for the company, were both reported to have dropped 7%. Gross margin is down; selling, general and administrative expenses are up. And inventory is piling up.

The stock did dip after this bearish earnings release, but the recent rally has brought SHLD to a quarterly high. The question investors should be asking now is whether to...