Trade-Ideas LLC identified

JC Penney

(

JCP

) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified JC Penney as such a stock due to the following factors:

  • JCP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $183.3 million.
  • JCP traded 53,535 shares today in the pre-market hours as of 9:08 AM.
  • JCP is up 2.3% today from yesterday's close.

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More details on JCP:

J. C. Penney Company, Inc., through its subsidiary, J. C. Penney Corporation, Inc., sells merchandise through department stores in the United States. Currently there are 6 analysts that rate JC Penney a buy, 3 analysts rate it a sell, and 7 rate it a hold.

The average volume for JC Penney has been 13.4 million shares per day over the past 30 days. JC Penney has a market cap of $2.5 billion and is part of the services sector and retail industry. The stock has a beta of 0.60 and a short float of 32.5% with 4.18 days to cover. Shares are up 28.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates JC Penney as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 3.42 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.23, which clearly demonstrates the inability to cover short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Multiline Retail industry and the overall market, PENNEY (J C) CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$232.00 million or 27.50% when compared to the same quarter last year. Despite an increase in cash flow, PENNEY (J C) CO's cash flow growth rate is still lower than the industry average growth rate of 66.36%.
  • 37.35% is the gross profit margin for PENNEY (J C) CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -4.72% trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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