When Do JCPenney, Getty Petroleum Offer Value Potential?

NEW YORK (TheStreet) - JCPenney's (JCP) disastrous quarter dominated the earnings scene yesterday. Many are writing off the company and embattled CEO Ron Johnson.

Of course, this piques my interest a bit, and I wonder whether this was the "kitchen sink" quarter; the one where the company hits rock bottom, and unleashes much or all of the negative news. The market does not appear to believe this is the case, and sees continuing deterioration. It will be difficult, however, to deliver comps worse than the -31.7% that the company reported for Q4.

There's so much negativity around this name, everyone is dumping it, yet I'll be watching for some, any signs of life. I've never owned it and was frankly a bit skeptical when some big players in the value crowd began touting it in 2011, primarily due to the perceived prowess of incoming CEO Ron Johnson, the Apple veteran, who came in with a lot of skin in the game, namely a $50-million stake in 7.3 million 7.5 year JCPenney warrants.

The stock took off primarily because of the notion that JCPenney could only prosper with Johnson at the helm. He is now seen as failing in his quest to right the ship; but turning around what is perceived as an old-time, archaic retailer is a tall order for anyone and Johnson has been hurt by all of the high expectations. By his own admission, he's made some mistakes, too.

While I am still not ready to own JCP here, I do get interested in situations when everyone else is selling. The trick however, is to determine whether the sellers are wrong, and whether they are pushing the share price well below what shares are really worth. I suspect that if -- and that's a big if at this point -- I really want to own JCP, there will be opportunities to get it a lower entry point.

JCP data by YCharts

1 2 Next › Last »