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Nervous markets await NvidiaThis would be a great candidate for Shorting if he did Short stocks. Retail is a very tough segment. It is specific to the middle-income US consumer. Has a lot of debt on the balance sheet and is struggling with its operations. Slowly starting to turn itself around. There was some improvement on its last quarterly call, but it is still tough out there. Growth seems to elude this company. Until there is some top line growth and some improvement in margin, there are probably better places to be in retail.
She likes to buy companies that are in a bit of trouble or are facing challenges. However, some challenges are a bit bigger than what she would like, and this is what is going on here. Retail in general has been a very tough, competitive environment. You really haven’t seen the consumer come back very much. This company is still in the stage of working through a transition, and a pretty big one at that.
The new CEO has done an astounding job of starting to stabilize this business. He has seen some comp revenue growth and same-store sales growth in the last couple of quarters. This is a very leveraged retailer, which is a dangerous place for investors to be. However, he thinks they will pull it off. He is a bond investor in this company.
Has put this into the category of “too tough to figure out”. Are they going up a lot, or are they going to zero? Had well published issues over the last several years. Still in a turnaround mode, but has $4.5 billion in debt, a lot more debt than equity. Lost money last year and analysts are forecasting they will make a little bit of money this year. Department store business is under a lot of pressure. Wouldn’t Short this because it has a very large Short interest, and if they do surprise and turn things around, the stock could go up a lot in a very short period of time.
Middle classed US consumers are squeezed. Dollar stores and Wal-Mart are doing reasonably okay and the high end stores are doing better. They are trying to get back and are making some progress, but he suspects, even with their balance sheet and cash situation, they are probably a little bit too late.
Has been run by somebody who does not really have retail experience. This is the mid-level, mid-price range of department stores which is under siege from both discounters on one side and high-end and online sales on the other. The change in direction in the last couple of years was a disaster. They are now trying to get back to basics and making some progress, but he wonders if it is too little, too late. The only saviour could possibly be their real estate value where they may still get something out of it.
J.C. Penney is a American stock, trading under the symbol JCP-N on the New York Stock Exchange (JCP). It is usually referred to as NYSE:JCP or JCP-N
In the last year, there was no coverage of J.C. Penney published on Stockchase.
J.C. Penney was recommended as a Top Pick by on . Read the latest stock experts ratings for J.C. Penney.
Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.
In the last year, there was no coverage of J.C. Penney published on Stockchase.
On 2020-05-18, J.C. Penney (JCP-N) stock closed at a price of $0.1897.
In addition to this being a late cycle stock, you also have to worry about them being hurt by Internet sales.