How Cheap Is J.C. Penney Now?

NEW YORK ( TheStreet) -- Back at the end of 2000 and the beginning of 2001, J.C. Penney ( JCP) shares were trading for even less than their current price. During that period, the stock changed hands for less than $10 a share.

Six years after J.C. Penney shares hit that bad patch, however, they were approaching $90. For some it was a thrilling ride with a 900% return.

So is it time to load up on JCPenney again, now that it's trading near 52-week lows? Maybe, if you want to hold them for the long term, but the retail space has shifted, raising the risk considerably.

(I recently wrote about what happens when a stock makes new 52-week lows in "J.C. Penney Survival Guide.")

Shoppers have divided retail into the haves and the have-nots; how long a store has been in business doesn't matter anymore in a world where location is one click and a UPS ( UPS) delivery van away.

In the same mall you are likely to find Sears ( SHLD), Macy's ( M), Radio Shack ( RSH) and Gamestop ( GME).

Sears was once the largest retailer but has since relinquished that distinction to Wal-Mart ( WMT). These days, Sears allows third-party merchants to sell within its Web site, similar to what Amazon ( AMZN) does.

However, at the individual level, Sears and J.C. Penney are no longer connecting with the consumer. Age and size don't matter as can be seen by Amazon's never-ending market share encroachment on traditional retail.

And you can't simply dismiss J.C. Penney's woes on a so-called price advantage by Amazon, because you also have Macy's, often in the same mall, prospering.

The same holds true for Gamestop and Radioshack. Gamestop eats surf and turf at the Palm restaurant in the Hamptons while Radioshack is eating ramen noodles.

Both are relatively small stores, and Radioshack should have the edge considering they have greater experience, but one decided to sell used games and one decided to sell cell phones.

Macy's and Wal-Mart know what customers want at the right price while Sears and J.C. Penney don't. That's not going to change overnight for J.C. Penney just because Bill Ackman is off the board.

JCP Revenue Quarterly Chart JCP Revenue Quarterly data by YCharts

Ackman may have created controversy and lots of headlines, but it isn't necessarily detrimental to have a board that is focused and active on improving the company.

For many board members in the corporate world, a seat on a board is little more than a paid social meeting with free food. For now, don't expect much of a change, and if you want to buy, only do so with an exceedingly long-term frame in mind.

If J.C. Penney can shift from survival mode into giving the customer a better experience and value than Wal-Mart and Target ( TGT), even if it means sacrificing margins, the retailer can then build from a foundation of stable revenue. Then we could see the stock start to move up again. Until then, everyone, including the shoppers, will notice fewer and fewer people shopping, and that just feeds upon itself.

At the time of publication, Weinstein had no positions in stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Robert Weinstein is an active trader focusing on the psychological importance of risk mitigation, emotion and financial behavior of market participants. Robert co-founded the investing blog StockSaints, where he writes a journal about his trading activity and experiences.

In addition to TheStreet, Robert also contributes to Real Money Pro, providing real-time trading ideas for stocks, options and futures.