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
TheStreet Open House

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.

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 (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.

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
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
BBY $38.75 0.70%
JCP $7.83 2.62%
AAPL $126.37 2.53%
FB $83.20 -0.13%
GOOG $552.03 0.67%


DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

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