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

Going Against the Crowd

J.C. Penney (JCP) is the epitome of a struggling retailer. Just when you think it can't get any worse for the stock, it stumbles further.

Ron Johnson, hailed by many in the value investing crowd as the cure for the old-time retailer, was unsuccessful in his stint as chief executive officer, and same-store sales fell off a cliff. Then Bill Ackman, one of the stock's biggest proponents, threw in the towel, quit the board of directors, and sold his stake.
[Read: <a target="blank" data-add-tracking="true" href=""><em>Growth at Emirates Airlines Shows Need for USAirways/AA Merger</em></a>]

This morning, the company's secondary stock offering was priced at $9.65 per share, 7% below yesterday' s closing price, and a level the stock has not seen since 1986. Although the company is asset rich in terms of real estate, owning more than 400 store locations, I'm not sure the dust has settled yet on the stock. It remains on my watch list. JCP Chart JCP data by YCharts

The other is a much smaller name, toy company JAKKS Pacific (JAKK), which I wrote about in July.
[Read: <a target="blank" data-add-tracking="true" href=""><em>Our Less Than Robust Bull Market Since May</em></a>]

At the time, the company had just reported a terrible quarter, and the share fell 40%. Since then, the stock has fallen another 33%. Analyst estimates are calling for a return to profitability in 2014, albeit a very small profit. While intrigued, I am not ready to pull the trigger on this one yet either. It's still a pretty messy situation, but one that bears watching. JAKK Chart JAKK data by YCharts

Both of these stocks could fall further; I am not yet convinced that the crowd has given up on either.

At the time of publication, the author was long Krispy Kreme and Gannett.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
At the time of publication, Heller was long XXXX.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.
2 of 2

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 $94.05 -1.20%
FB $117.62 0.16%
GOOG $696.62 0.62%
TSLA $223.52 -3.80%
YHOO $35.96 -0.14%


Chart of I:DJI
DOW 17,654.38 -96.53 -0.54%
S&P 500 2,049.94 -13.43 -0.65%
NASDAQ 4,724.6070 -38.6170 -0.81%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs