Ticker Shock: Sears Could Be Worse; GM Reads 'Em and Weeps

I thought we had it yesterday; thought we were going to end up in the green after that big rally. But no such luck. Maybe today's our lucky day.

Asian stocks closed lower but not by much. The Hang Seng was off just under 1%, and the Nikkei closed off a fraction. Meanwhile Europe was showing me some green earlier this morning. And here in the US we're currently trading higher. Fingers crossed!

Here is what I’m focused on this morning…

Gannett (GCI):
 The company perhaps best known as the publisher of USA Today declared a dividend of $0.04 on Wednesday.

The trouble with that is it’s a country mile south of the $0.40 a share that it had offered up previously.

To be frank, if I were on the board, I probably would have done the same thing. After all, the forward yield was right around 40% by my math so it made some sense. In addition, the more than $300 million it could save as a result seems tempting too.

I’m certainly not thinking that every shareholder is going to be a happy camper, though. After all, $0.40 to $0.04 is a pretty big drop. But I don’t think it was unexpected given the trouble newspapers are having. In addition, just last week the New York Times (NYT) suspended its dividend, so I think the writing was on the wall, and that a big part of this may have already been factored into the share price.

Now to be clear, I’m not ponying up for the stock just yet. I think there are a lot of balls up in the air here (and throughout the newspaper business in general). But down the line, I leave open the possibility, as the company has a good history and lots of readership. And once it pays out that $0.04 dividend, it could still have a pretty decent forward yield if the share price holds.

Sears Holdings (SHLD):
 The retailer known for both its Sears and Kmart concepts released its fourth-quarter numbers earlier this morning.

Excluding items, it put up $2.94 a share in the period ended January 31. And I have to tell you, that catches my eye, because the Street was looking for $2.68 a share. Seriously - it blew away the estimate.

I thought it was also interesting that the company bought back nearly 3 million shares in the quarter - something people seem to be glossing over altogether.

However, not all was peaches and cream for Eddie Lampert and his crew. Revenues came in at about $13.3 billion in the period, which was a double-digit percentage decline from the comparable period last year. Plus, it was more than a couple of corduroy pants shy of the $13.99 billion top line that analysts had been expecting.

Sears and Kmart seem to be hanging in there a lot better than I thought they might, given the economic environment. But at the same time, I have no interest in the shares even though they're trading at essentially a fraction of their 52-week high.

Seriously - I don’t see where the company is headed from here, particularly Kmart. Where's it going to be, 5 to 10 years out? Sure, it was a decent store when I was a kid. But now it lacks in comparison to Wal-Mart (WMT) in terms of merchandise selection. And when it comes to price, I’m not too impressed either. There's nothing at Kmart I can't get at Target (TGT), Wal-Mart, or even some of the deeper-discount dollar stores.

With all that in mind, I’ll shut up now because I do think that Sears will trade higher on this news. And again, it was a good bottom-line beat. Congrats, Sears longs.