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!

J.C. Penney: A Band-Aid Won't Stop the Bleeding


On Jan. 15, Penney announced a "strategic initiative" -- a band-aid -- to close 33 under-performing stores as part of "its turnaround efforts." Around 25% of the closures (10) are owned by REIT landlords: four are owned by CBL Properties (CBL), two owned by Simon (SPG), one by Westfield (WDC), one by Rouse (RSE), one by Macerich Co. (MAC) and one by Pennsylvania REIT (PEI).

Penney said the company may save around $65 million beginning in 2014. However, the landlords with the lowest-quality properties will likely see more closures in the upcoming months. Investors should pay close attention to Penney's off-balance sheet assets as they could be the final straw that makes or breaks the 85-year-old chain. Conversely, REIT Investors should monitor their portfolio of assets and determine whether or not there is a "margin of safety" that will insure REIT investors against a tenant bankruptcy.

Now may be a good time to consider the REITs with more necessity-based revenue.

Some of my favorites include Excel Trust (EXL), yielding 6.23%, or Inland Real Estate Corp. (IRC), yielding 5.48%. Also, a more defensive play may be to move up the quality ladder and invest in the "blue-chip" mall landlord Taubman Centers (TCO). I really like the foot traffic that Taubman's malls generate and the consistency of the earnings is directly correlated with the sustainable dividend record -- a 15-year streak of never cutting a dividend (the current yield is 3.13%).

More information on REIT investing can be found in my monthly newsletter.

At the time of publication the author had no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 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