Is jcpenney stock a buy

What a mess retail has turned out to be. JCP was thought to be one of the first mass retailers to go out of business just a few years ago.

Near a Year Low, Is J.C. Penney Stock a Buy? -- The Motley Fool

But alas, Sears Holdings NASDAQ: SHLD seems to now be the forerunner for that title. So what should we make of JCP's future? Let's take a look. The following three slides were presented in the J. Penney Q1 earnings transcript:. Despite the miss in Q1 , J. Penney with its Clearly retail is hurting, but J. Penney is holding its ground. Penney is taking bold initiatives by expanding the Sephora rollout, introducing appliance into more stores, and going after the hospitality industry with its newest initiative.

All are unique to J. Penney and gives it differentiation from its peers. Margins increased 10bps in Q1 and are projected to be up even more in the remainder of What set the tone for the large drop in the stock of J. Penney this past month was the wording of CEO Marvin Ellisons' comments. Rather than focusing on the positive strides JCP has made, he starting out by discussing the miss in top line sales growth.

The tone was set.

The following was taken in part from the J. Given the debacle in the retail sector, Wall street was not pleased. This is when the bulls need to assess the current state of J. Penney and look at the positives. As a result of the retirement of the debt, the net debt to EBITDA will drop to This is a level not seen for years and is proof that the company is moving towards a much healthier balance sheet. Do not get me wrong. JCP is not a stellar investment yet. This is a point that has not been lost on the short selling community.

Short interest continues to increase as reported by shortsqueeze.

Penney is clearly a better candidate for a turnaround than Sears, but it is priced for disaster. As mentioned earlier, its latest earnings release saw a comp sales decrease of Vendors are now balking at guaranteeing shipments to SHLD later in the year for the pivotal holiday season.

If OK, in my view, when SHLD declares bankruptcy, there will be a huge defection to other retailers by its shoppers. The core Sears customer is more likely to shop at JCP than many of the other retailers based on demographics. OK - I have to mention them. No one can dispute that. People love shopping with them. They have online shopping down to a science. Since gross margins have actually increased at JCP despite these promotions, it seems like a prudent decision. JCP is training its customer base to look for emails.

Every coupon redeemed is one less order going to Amazon. Last year, on 5.

JCP Stock Price - J.C. Penney Co. Inc. Stock Quote (U.S.: NYSE) - MarketWatch

Buy when no one else wants to. Retail brick and mortar stores will never die. They just need to continue to reinvent themselves and consolidate. I am not putting a price target on J. Penney, but I do view it as an aggressive buy with the expectation of it outperforming the major market indices for the remainder of If you enjoyed this article and would like to follow me to read future articles, go to the top of the page and click the "Follow" button under the title and next to my name, or click here.

Investing in stocks such as J. Penney can be risky. There is no guarantee that your investment will be safe.

J.c. Penney Company, Inc. Holding Company - JCP - Stock Price Today - Zacks

There is also a possibility that you may lose some or all of your investment. Please do your own due diligence before investing in J. Penney or any other investment. Information provided in this article is informational and should not be the sole guide to determine if investing in the company is appropriate for you. The above are my opinions and should not be the sole purpose for initiating a trade. Always do your own due diligence prior to investing.

Also remember to only initiate trades that are within your pre-defined risk parameters.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article. Long Ideas Short Ideas Cramer's Picks IPOs Quick Picks Sectors Editor's Picks. Penney - Buy, Sell Or Hold? Summary Outstanding debt is being slashed. Same-store sales are better than many competitors. The balance sheet is improving.

Short interest continues to rise. Q1 Results and Forward-Looking Guidance The following three slides were presented in the J. Penney Q1 earnings transcript: Q1 results Despite the miss in Q1 , J. Sears Holdings comp sales were M comp sales were DDS comp sales were KSS comp sales were JWN comp sales were Net Debt Forecast for As a result of the retirement of the debt, the net debt to EBITDA will drop to Short Interest - the Achilles' Heel Do not get me wrong.

The Amazon Effect OK - I have to mention them. Conclusion So what does it all mean? Investing Ideas , Long Ideas , Services , Department Stores. Want to share your opinion on this article? Disagree with this article? To report a factual error in this article, click here. Follow Seattle Contributor and get email alerts.