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.
It was a one-time event that took RadioShack up double digits in a single day, too. That event was a clever commercial during the Super Bowl. The Friday before the Super Bowl, Jan. 31, RadioShack closed at $2.40. On Monday, Feb. 3, it hit a high of $2.68. RadioShack is now at $2.24, thanks to the negative sales growth, negative profit margin, high debt load and crushing competition -- the same negatives faced by J.C. Penney and other retailers, such as Bon-Ton Stores (BONT) and Sears Holding (SHLD).