This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Will JC Penney Shares Reboot Like Best Buy?

Stocks in this article: BBY JCP

Chris Lau, Kapitall: Best Buy was able to recover from a difficult year in 2011, but can JC Penney shares pull off a similar turnaround?

JC Penney (JCP) rose by nearly 20% in the past week – a surprise considering the stock dropped precipitously over the last year. After hitting a 32-year low of $6.24 earlier this month, JC Penney is now trading above $8.30.

Shares rose after a mistaken quote that same-store sales will be positive this quarter. With bearishness at 76.8 million shares as of October 15, 2013, shares could move even more when JC Penney reports earnings on November 19.

Sales could rise

Last week JC Penney CEO Mike Ullman noted at the 2013 Women’s Wear Daily Apparel & Retail CEO Summit there were 30 things that were wrong with the company, and that two-thirds of them had been addressed after Ullman took over. Ullman also reiterated that comparable store sales in the last few weeks of the third quarter will be positive.

Then again, sales last year were very weak, so investors should have already expected an improvement of some kind, however modest.

Bankruptcy risks

Fears the company could go bankrupt drove JC Penney shares even lower. On the debt market, unsecured debt for JC Penney is valued at $0.65 on the dollar. To address these concerns last September, the company raised $800 million through an equity offering. This could give JC Penney ample cash to alleviate supplier worries for the company’s balance sheet.

Quarterly results in focus

Any surprising improvement in sales could be enough to ignite JC Penney shares. The company probably has around $2.3 billion in cash, but $4.85 billion in long term debt. If cash flow is not negative, JC Penney will have more time to reverse its operations. Once it finds solid footing again, the company may be in a better financial position in 2014.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs