This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Buy AMZN on Weakness, Sell JCP on Strength

NEW YORK ( TheStreet) -- J. C. Penney (JCP - Get Report) CEO Ron Johnson comes off as a likeable guy. All it takes is a quick glance at the presentation he gave investors in January to figure that out.

Near the beginning of his speech, Johnson tells the story of going to Steve Jobs's house to inform him he would be leaving Apple (AAPL - Get Report) to take a new gig. When Johnson told him he was headed to J. C. Penney, Jobs asked him -- paraphrasing here -- if he was crazy.

Johnson made a connection between Target (TGT), Apple and J. C. Penney. Follow this logic: According to Johnson, when he left Target for Apple, people thought he was nuts because Target was doing great and Apple not so much. And now, yet again, he chose to leave a company at the top of its game for one facing considerable headwinds.

Johnson pointed out, however, that it was not quite the same situation. J. C. Penney is in better shape today than Apple was when he moved to Cupertino. Johnson further made the incredibly optimistic leap that, on his watch, J. C. Penney would go on the same trajectory as Apple did between 2000 and 2011.

Follow TheStreet on Twitter and become a fan on Facebook.

If we use stock price as a gauge, we can expect JCP to appreciate by approximately 1,600%. Using Tuesday's closing price of $35.67, that type of pop would put JCP at about $606 a share come 2023. I realize the unfair lunacy of this projection, but Johnson appeared to be quite serious when he set this expectation for himself.

J. C. Penney Will Not Save Brick-and-Mortar Retail

In retail, most companies lack the three things needed to survive in a world defined by on-demand, instant gratification and social media:
  • A seamless ecosystem
  • High-end or exclusive products
  • A unique or special in-store or online experience
  • As a brick-and-mortar and online retailer, Apple scores high on all three counts. On exclusivity it lacks just a little, but it compensates for this elsewhere. You can buy Apple products from various sources; however, for most of us, picking up an iPad at Target is little more than an impulse buy. That's why they're there. To drive unplanned purchases and serve those not in close proximity to an Apple retail store.
    1 of 3

    Check Out Our Best Services for Investors

    Action Alerts PLUS

    Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    Quant Ratings

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    Stocks Under $10

    David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    14-Days Free
    Only $9.95
    14-Days Free
    Dividend Stock Advisor

    David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Updates with exact steps to take - BUY, HOLD, SELL
    Trifecta Stocks

    Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

    Product Features:
    • Model Portfolio
    • Intra Day Trade alerts
    • Access to Quant Ratings
    Real Money

    More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

    Product Features:
    • Access to Jim Cramer's daily blog
    • Intraday commentary and news
    • Real-time trading forums
    Only $49.95
    14-Days Free
    14-Days Free
    AAPL $94.02 0.00%
    AMZN $502.13 0.00%
    JCP $7.40 0.00%
    FB $104.07 0.00%
    GOOG $683.57 0.00%


    Chart of I:DJI
    DOW 16,204.97 -211.61 -1.29%
    S&P 500 1,880.05 -35.40 -1.85%
    NASDAQ 4,363.1440 -146.4150 -3.25%

    Free Reports

    Top Rated Stocks Top Rated Funds Top Rated ETFs