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: Short Squeeze of the Season:

Stocks in this article: JCP M

NEW YORK (TheStreet) -- J.C. Penney  (JCP) might not be profitable. But it's on the right path.

The retailer reported a smaller than-expected-loss and strong sales growth that gave credence to arguments that returning CEO Myron Ullman's plan to bring back the old, discount-heavy J.C. Penney -- while retaining the cleaner, "high-end" store look -- is working. Prior CEO, Ron Johnson, had tried to cut back on clearance sales and other markdowns in an effort to make the brand more of an equal to, say, Macy's (M).

Shares climbed more than 18% Friday morning to just below $10. And users anticipated more gains as shorts were forced to cover positions. Short interest in JCPenney is 31.28% of float, according to statistics on

$JCP Decision time. Should I double down now for short squeeze to come over next few days. ? Bob Sparks (@Happyinvestor) May. 16 at 09:46 AM

''@stef540 says "$JCP can be the biggest short squeeze in end 2013 and 2014"" +46% from 10/21 lows" Mother of the big short squeeze!!!" ? Stef (@Stef540) May. 16 at 08:57 AM

JCPenney said same-store sales rose 6.2%, exceeding prior guidance. It reported net sales of $2.8 billion, beating consensus estimates by $90 million. JCPenney also said margin improvement helped it report a smaller loss than anticipated, $1.15-per-share versus the $1.25 Wall Street had expected.

"It is clear that our efforts to re-merchandise many areas of the store and revamp our messaging to the customer are taking hold," said Ullman, in a statement. "Despite a difficult retail environment, our strong performance during the Easter holiday period and other key promotional events enables us to deliver better than anticipated sales results."

Management guided to comparable store sales growth in the mid-single digits and significant gross margin improvement.

Crowd sentiment had called the positive earnings report earlier this week. StockTwits' users had remained 86% bullish into earnings, despite a 5% fall in shares before the report. Many had argued that Macy's sales miss might have come from more shoppers walking into JCPenney stores to take advantage of discounts.

$JCP M's report means nothing to JCP that we know yet.Weather may have equally hurt JCP or maybe M sales hurt by JCP increase.Time will tell ? Aaron Warwick (@aarondwarwick) May. 14 at 10:38 AM

Some traders maintained that JCPenney still wasn't a buy, despite the recent sales traction. The company has a market cap of $2.96 billion and negative profits. Eventually, the market will want to see that JCPenney can entice shoppers without liquidating merchandise and the momentum will reverse, they argued. And they said short sellers would be willing to wait for that to happen.

$JCP For those expecting a massive squeeze. Is the market ever really that obvious? It always pays to look from both sides. ? KnowOne (@Knowone777) May. 16 at 09:14 AM

@Knowone777 shorts have already covered and are ready to reshort I think. Bulls don't give enough credit. Look out below. ? Entrada (@entrada) May. 16 at 09:15 AM

The consensus price target on the stock is $9.24. JCPenney traded above that by 10a.m. Friday. But most StockTwits' users expected the positive momentum and news flow to continue. Already, analysts at two banks -- Deutsche Bank and Piper Jaffray -- came out with bullish notes, according to the Analyst Ratings Network. Deutsche Bank raised its price target to $10-per-share from $6 and reiterated a "hold" rating. Piper Jaffray maintained its positive rating.

$JCP : Upgrades will help this stock to cross $10.11 ? vik (@vik_canadian) May. 16 at 09:19 AM

More positive news would bring on more gains and more short covering, bulls argued, propelling the stock higher.

$JCP remember what short squeezes look like. $13 can come quick.. I'm sure there are plenty of stocks out there that u can refer to. No pos ? The Hog (@Fat_Hog_on_Wallstreet) May. 16 at 07:10 AM

At the time of publication the author held no positions in any of the stocks mentioned.

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

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 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

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