NEW YORK (TheStreet) -- Wall Street is investing by the mantra "no news is good news" when it comes to J.C. Penney (JCP). After a week which saw the retailer lose one-fifth of its value and saw its stock price fall into the high-single digits, the stock is rallying 4.8% to $8.47 on Monday.
Last week, the Plano, Texas-based retailer posted a double-digit comparable sales gain of 10.1% for November, a remarkably stronger figure than the 34% drop in comparable sales over the same period a year earlier.
Then, on Thursday evening, the department chain disclosed it had received a letter of inquiry from the Securities and Exchange Commission regarding its financial position, including its liquidity, debt and details of its proposed public stock offering.
"The company is cooperating with the Securities and Exchange Commission in regards to its inquiry," J.C. Penney said in a recent SEC 10-Q filing.
A second nail in the coffin came when hedge fund manager J. Kyle Bass told Bloomberg on Friday he had sold his stake in the Plano, Texas-based business. As of September, the Bass-run hedge fund Hayman Capital Management held 11.4 million shares, or a 5.2% stake, in the company.
Year to date, the stock has fallen 57.1%. The SPDR S&P Retail (XRT) ETF has gained 38.56% over the same period.
TheStreet Ratings team rates J.C. Penney as a Sell with a ratings score of D. The team has this to say about its recommendation:
"We rate J.C. Penney (JCP) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins."