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Pumpers, Dumpers Want to Turn JCP Into Another Best Buy

NEW YORK (TheStreet) -- While everybody else was tied up fangirling over J.C. Penney's (JCP - Get Report) increase in comparable store sales, TheDeal's Richard Collings was busy providing much-needed context:

For JCP management to put out an announcement that basically says We don't suck quite as bad as we did when we hit rock bottom was, in and of itself, absurd. But the way the company colored its press release further illustrates why long-term investors should read nothing into this so-called news:

We are pleased with our performance over the Thanksgiving holiday weekend, particularly in light of the continued spending pressures on consumers.

Typical ... continued spending pressures on consumers. The classic fallback on external forces that are, of course, beyond the actor's control. Add tough economic times to the list of scapegoats employed by JCP's current regime.

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But, putting the company's lame organizational culture and public face aside, be aware of what's going on here before you purchase JCP shares.

Management at the company looks good if the stock goes up.

Investors love beaten down stocks because they a) see nothing but upside and b) don't think the price can get much lower. On even the slightest good news, they see a name like JCP taking off, as evidenced by Tuesday's after-hours move.

If they're lucky -- both management and these speculative investors -- JCP will magically morph into another Best Buy (BBY - Get Report), a company up 256% year-to-date on nothing but momentum-injected air and anything but a meaningful, long-term and sustainable turnaround plan.

A few Wall Street analysts, cats on message boards and other usual suspects will use this news and anything that follows to start the pump on JCP. But I'm not saying don't buy the stock.

In an excellent Real Money piece, Jim Cramer basically indicated that you have to take what the market gives you:

Welcome to the world of bull-market discipline -- the discipline to buy stocks that aren't cheap but are right. It's the rigor to recognize what the market wants, and not what you want. It's the dichotomy that says you would rather have your portfolio be hated by the intelligentsia and make money than be bound by concerns that simply aren't working right now.

You can apply what Cramer said there, with respect to Amazon.com (AMZN), to the JCP situation.

No, JCP is not an expensive stock in the spirit of AMZN, but it might be "what the market whats" even if it goes against your gut as a long-term play. You want a portfolio that, while potentially ugly, "make(s) money" despite "concerns that simply aren't working right now."

Just don't confuse J.C. Penney the company with a viable retailer on the upswing. It's not!

And don't mistake JCP the stock for a solid long-term investment. It's merely the latest tool to provide investors no longer concerned with buying great companies -- and doing the work to find them -- a quick and seemingly easy buck.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist for TheStreet. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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