J.C. Penney (JCP-N)

In addition to this being a late cycle stock, you also have to worry about them being hurt by Internet sales.

(A Top Pick Aug 18/14.) SHORT. Up 9.32%. He is no longer in this, but was actually looking at putting on a Short position today. A very weak retailer, and hard to see much growth in this company. Suffering with too much debt.

(Market Call Minute) The balance sheet is falling away and they are forecasting losses so not the kind of things to invest in.

He owns the bonds. The company is improving, same store sales are improving, but it is still losing money and will continue for a couple of years. This is for speculative investors only. He thinks they will survive, however.

This 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.

SHORT. Not making money. Hemorrhaging cash. Most people going there were for the coupons and the discounts. Start covering when you get to $7.

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.

J C Penney (JPC-N) or Coach (COH-N)? He would prefer Coach. The trouble with this company is that it makes no money. This is a department store that is competing with a lot of other department stores that are a way better at that.

J. C. Penny (JCP-N) or Coach (COH-N)? Wouldn't Buy this one as you are sort of bottom fishing. The retail sector is such a competitive one.

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.

Too difficult to tell how things will work out. They could file for bankruptcy protection.

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.

This could be a good time to buy this one. Went on his Watch List a couple of months ago but it might still be too early in the turnaround to Buy in. You might have to sit and wait longer. There is still tremendous risk. They are still not out of the woods and could end up filing Chapter 11.