NEW YORK (TheStreet) -- One of the many "delights" of online dating is how a minor feature is overemphasized to cloak major weaknesses. If a profile has "good cook" with "great sense of humor" who "dances well," it could be an attempt to divert attention from a deal breaker (a current picture). This is the best explanation for the recent run-up in the share price of J.C. Penney (JCP), as it was with RadioShack (RSH) the day after the Super Bowl.
Over the last month of market action, J.C. Penney is up more than 45%.
What has J.C. Penney stock dancing so well is the announcement that it is relaunching its home goods section along with it posting a profit for the fourth quarter. Making it unattractive is that the "profit" is from a one-time tax benefit and property sale along with negative sales growth (-2.60%), negative profit margin (-11.60%) and a high debt load (2.12 debt-to-equity ratio in an industry where the average is 0.85) that is not going anywhere; all appear to be permanent flaws.
There is no need to engage in a philosophical debate as to what came first -- the falling number of customers at the malls or the collapsing retail store. Rather attribute much of that change in the evolving shopping habits of Americans, who favor Amazon and eBay. At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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