3. Penney's Problems
Happy anniversary Ron Johnson! We sure hope you are enjoying this special milestone as much as we are.
We can barely believe it ourselves, but it's been a whole year since J.C. Penney (JCP) introduced Ron as its new CEO. It almost seems like yesterday when shares of the historic retailer jumped 17% to $35 on the news that the former Apple (AAPL) marketing whiz would take the reins. Even now we can see the pride in hedge fund manager Bill Ackman's eyes when he called Ron's hiring a "credit to the company" of which his Pershing Square hedge fund owns a 16.5% stake.Now, here we are 12 months later and it's amazing to see all Ron has accomplished for the $53.3 million in total compensation Penney's paid him in 2011. Let's see. The shares trade 30% lower than at this point last year, after the stock dropped an additional 3% Tuesday following Johnson's less-than-inspiring speech at an investor conference. The company's same-store sales came in worse than expected last month as a result of Johnson's admittedly "confusing" new pricing model. Its customers are fleeing because they can't use their coupons. Its employees -- the remaining ones -- are irate. Its stores are closing. Its losses are widening. Yep Bill, let's give the guy "credit", because he sure has had one heckuva monumentally crappy year. But just you wait, says Johnson, because once he gets done remodeling Penneys stores -- once again, the remaining ones -- then you'll see the stock really soar. "There'll be one year of sales going down that sets the stage for a year of take off," Johnson told attendees Tuesday. You got it Ron. We'll wait till next year before passing judgment. The question is, if this keeps up, will your shareholders wait for you as well? You know...the remaining ones.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV