Author Topic: JC Penny stock  (Read 9807 times)

taiwwa

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JC Penny stock
« on: May 04, 2017, 04:40:31 AM »
The stock has hit all-time lows recently. Good time to invest? Despite their difficulties they do seem better put together than Sears, and they've been making a move into appliance sales and cosmetic sales.


capitalninja

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Re: JC Penny stock
« Reply #1 on: May 04, 2017, 06:18:45 AM »
Based on your goals only your personal analysis can tell you if purchasing JC Penny stock would be good for you.  Based on the criteria that I use when purchasing individual stocks, there's no way I would touch JCP. They haven't paid a dividend since 2012 and to your point, the stock has gone from 68 per share to 5 in the past 10 years. The overall trend has been down for this company which isn't surprising considering the space they compete in.

In addition to examining their financial data, you should ask yourself what competitive advantage JC Penny has within its industry.  What can/do they do that Dillards, Macy's, Kohls, TJX, etc. can't easily replicate? I think you'll find the answer to be "not much" which the share price reflects. As an additional experiment, ask yourself when was the last time you or anyone you know purchased something at JC Penny vs. their competitors and why?

For these and other reasons, I wouldn't own this stock directly. If you own shares in VTI or Vanguard's small cap funds, you already have some JCP which in my opinion is currently the safest way to have exposure to this company.

Khan

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Re: JC Penny stock
« Reply #2 on: May 04, 2017, 11:28:16 AM »
One of the most important things about investing is "Do not lose money". A loss is something the rest of your portfolio has to work doubletime to make up for. JCP has been a declining company in a declining industry(retail), with very little good news that I've seen in the last 2 years, let alone the last 10.

If you think it's a value at this point, more power to you, but all I see is Radioshack, Sears... A falling knife.

Trudie

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Re: JC Penny stock
« Reply #3 on: May 04, 2017, 01:26:17 PM »
I would not bet on retail stocks right now, unless they have a strong and well-developed online presence.  Recent reports (on NPR) highlighted that retail brick and mortar stores are closing down like crazy in this country, including JCPenney.  (They are closing a location in my town that has been open for several decades and vacating a prime property on our main street.)  I just don't see a bright future for retail brands that aren't innovative and have relied so heavily on brick and mortar locations.

jjcamembert

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Re: JC Penny stock
« Reply #4 on: May 04, 2017, 02:19:36 PM »
I placed a short-term bullish trade on JCP (sold $5 puts), using less than 0.5% of my buying power. So, sure I'm bullish just because the stock is so cheap, I figured I'd take a shot. Not planning on any home-runs with this though.

There are so many other "cheap" retail stocks out there that I'd pick over JCP: M and TGT come to mind. Just remember that stocks can go to $0.

ChpBstrd

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Re: JC Penny stock
« Reply #5 on: May 04, 2017, 09:38:08 PM »
At that level of risk, speculating on a decline in mall REITs would be a gamble more in line with economic realities.

E.g. buy a LEAP put on a mall REIT, sell a LEAP put in an apartment REIT for nearly-net-zero opening position and neutral time decay.

Car Jack

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Re: JC Penny stock
« Reply #6 on: May 05, 2017, 07:42:16 PM »
I invested in a big, beaten down stock at $7 a share some years ago.  Similar position that JC Penny is in today.  How'd I do?  The company was Polaroid and they went bankrupt.

I don't see why JCP won't follow the same path.

Ocinfo

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Re: JC Penny stock
« Reply #7 on: May 05, 2017, 07:50:43 PM »
Warren Buffet says, It's better to buy a great company at a good price than buy a good company at a great price.

JCP is definitely not a great company and there is plenty to debate if it's even a good company.


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Re: JC Penny stock
« Reply #8 on: May 05, 2017, 09:56:09 PM »
The stock has hit all-time lows recently. Good time to invest? Despite their difficulties they do seem better put together than Sears, and they've been making a move into appliance sales and cosmetic sales.

Nope nope nope.  They're not a company that is doing well in general but just had a short run of bad luck.  They are a retailer that is being slowly demolished by online retailers, brands that are cheaper, brands that are trendier, and brands that provide higher quality.  And what do they have that will let them excel in appliances and cosmetics?  Nothing that I can see.  I don't know of anyone who, upon needing a new washing machine, would decide to wander a department store like J.C. Penney.  Women who don't care much about cosmetics use drugstores, and those who really care are probably shopping at Ulta and Sally's, dedicated stores.  I think they would have to change their name and rebrand completely to stand a chance long-term, and I don't see that happening.

Stick $100 play money in it, but don't put serious dollars here.

chasesfish

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Re: JC Penny stock
« Reply #9 on: May 06, 2017, 07:31:15 AM »
My usual comment is avoid retail investing unless they meet the following criteria:

Sell Food
Sell Home Improvement Products
Sell Automobile After-Market Parts

Everything else is subject to Amazon.

Food is perishable and is consumed every day.  Home Improvement products and Automobile parts tend to be heavy and needed quickly.  I like Costco, Autozone, and Walmart.

All that being said, I live near their corporate HQ and have heard Marvin Ellison speak a number of times.  He's a direct descendant of Frank Blake, the CEO who was responsible for Home Depot's incredible turnaround.  If you want to make a *speculative* bet in a really crappy industry, I think you'd be betting on an great operator.  I just don't know if he's good enough to get JCP through all the issues in that industry

taiwwa

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Re: JC Penny stock
« Reply #10 on: May 06, 2017, 08:56:56 AM »
My usual comment is avoid retail investing unless they meet the following criteria:

Sell Food
Sell Home Improvement Products
Sell Automobile After-Market Parts

Everything else is subject to Amazon.

Food is perishable and is consumed every day.  Home Improvement products and Automobile parts tend to be heavy and needed quickly.  I like Costco, Autozone, and Walmart.

All that being said, I live near their corporate HQ and have heard Marvin Ellison speak a number of times.  He's a direct descendant of Frank Blake, the CEO who was responsible for Home Depot's incredible turnaround.  If you want to make a *speculative* bet in a really crappy industry, I think you'd be betting on an great operator.  I just don't know if he's good enough to get JCP through all the issues in that industry

I have always been disappointed buying apparel online. I tried buying some clothes on amazon a few years back, and they were overpriced and the material was thin and cheap. I don't see how amazon can offer value there due to shipping costs.

chasesfish

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Re: JC Penny stock
« Reply #11 on: May 06, 2017, 11:49:16 AM »
Yeah, I don't buy apparel online either, but I do pickup the random things I need when in Costco buying groceries

TomTX

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Re: JC Penny stock
« Reply #12 on: May 06, 2017, 08:34:54 PM »
My usual comment is avoid retail investing unless they meet the following criteria:

Sell Food
Sell Home Improvement Products
Sell Automobile After-Market Parts

Everything else is subject to Amazon.

Food is perishable and is consumed every day.  Home Improvement products and Automobile parts tend to be heavy and needed quickly.  I like Costco, Autozone, and Walmart.

Just as an FYI - in my market, Amazon had a pretty wide variety of auto parts at good prices with same day delivery if ordered in the morning. Min $35 order with Prime to get free same-day. Otherwise, $6 for same day.

chasesfish

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Re: JC Penny stock
« Reply #13 on: May 07, 2017, 06:29:16 AM »
TomTX - I agree with you, I think YouTube has the ability to disrupt Home Depot and the Auto Part retailer's moats.  Those are two stores where people still like going in and asking the sales reps stuff for their knowledge.

I'm very familiar with Amazon's direct delivery of Autoparts, I own quite a bit of Genuine Parts (NAPA) stock and its putting a dent in that business.  Direct delivery to professionals requires no expert interaction.

If my basis weren't so low, I'd sell it.  For now I'll settle for the near 3% yield and take my capital gains when they're tax free in retirement.

taiwwa

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Re: JC Penny stock
« Reply #14 on: May 07, 2017, 07:47:31 AM »
I checked out TJ Maxx stock. It has a $50 billion cap, while JCP is like $1.8 billion.

My logic is that JCP could simply copy TJ Maxx.

My recent visits to JCP haven't shown much change though. It looks like the new CEO is too cautious, which might explain the stock drop. It does look like it is in better shape than Sears at least, but it was mostly empty.

JetBlast

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Re: JC Penny stock
« Reply #15 on: May 07, 2017, 08:50:07 PM »
I checked out TJ Maxx stock. It has a $50 billion cap, while JCP is like $1.8 billion.

My logic is that JCP could simply copy TJ Maxx.

There's nothing simple about it. They are vastly different businesses. For starters, TJ Maxx has three well known brands in the US that target different segments. TJ Maxx, Marshall's, and HomeGoods. They also have a few other brands in the US and internationally. How is JCP going to quickly spin up a few new brands without burning through their cash reserves? It would be a huge investment. Not to mention a multitude of other differences between the two companies. It would take years (if not decades) to transform JCP into anything close to the TJX model.

Besides, simply copying another business is a strategy that almost never works. Why should TJ Maxx customers switch over to JCP if there's nothing different from what they can already get at TJ Maxx? 

ChpBstrd

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Re: JC Penny stock
« Reply #16 on: May 07, 2017, 09:06:13 PM »
I checked out TJ Maxx stock. It has a $50 billion cap, while JCP is like $1.8 billion.

My logic is that JCP could simply copy TJ Maxx.

There's nothing simple about it. They are vastly different businesses. For starters, TJ Maxx has three well known brands in the US that target different segments. TJ Maxx, Marshall's, and HomeGoods. They also have a few other brands in the US and internationally. How is JCP going to quickly spin up a few new brands without burning through their cash reserves? It would be a huge investment. Not to mention a multitude of other differences between the two companies. It would take years (if not decades) to transform JCP into anything close to the TJX model.

Besides, simply copying another business is a strategy that almost never works. Why should TJ Maxx customers switch over to JCP if there's nothing different from what they can already get at TJ Maxx?

It's wrong to think in terms of what a company "could" do. Their executives have had that decision available for years. They won't do it. Hell, JCP still has departmental checkout. What is this, 1960? They haven't figured out why they're losing. Probably the management culture is so toxic anyone with new ideas gets their head chopped off. How else could things be so backwards?

So yes, there may be enough resources present that a benign dictator CEO could turn the thing around. But that outcome nearly never happens. Why would such a person waste their talent butting heads with dinosaurs who would rather wind the thing down and retire on their exit packages (courtesy of bondholders)? Don't bet money on them doing the right thing.


taiwwa

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Re: JC Penny stock
« Reply #17 on: May 08, 2017, 02:27:43 PM »
I checked out TJ Maxx stock. It has a $50 billion cap, while JCP is like $1.8 billion.

My logic is that JCP could simply copy TJ Maxx.

There's nothing simple about it. They are vastly different businesses. For starters, TJ Maxx has three well known brands in the US that target different segments. TJ Maxx, Marshall's, and HomeGoods. They also have a few other brands in the US and internationally. How is JCP going to quickly spin up a few new brands without burning through their cash reserves? It would be a huge investment. Not to mention a multitude of other differences between the two companies. It would take years (if not decades) to transform JCP into anything close to the TJX model.

Besides, simply copying another business is a strategy that almost never works. Why should TJ Maxx customers switch over to JCP if there's nothing different from what they can already get at TJ Maxx?

It's wrong to think in terms of what a company "could" do. Their executives have had that decision available for years. They won't do it. Hell, JCP still has departmental checkout. What is this, 1960? They haven't figured out why they're losing. Probably the management culture is so toxic anyone with new ideas gets their head chopped off. How else could things be so backwards?

So yes, there may be enough resources present that a benign dictator CEO could turn the thing around. But that outcome nearly never happens. Why would such a person waste their talent butting heads with dinosaurs who would rather wind the thing down and retire on their exit packages (courtesy of bondholders)? Don't bet money on them doing the right thing.

So I went to see JCP today. Also stopped by TJ Maxx.

Yeah, the JCP wasn't doing too well. You are right about the departments thing. JCP is kind of like a mall in a lot of ways, with each department being its own store. The clothes were of good quality, but prices were also fairly high. It also just seems like a lot of work having to navigate your way through.

Going to TJ Maxx immediately it seems overflowing, kind of like one big messy clearance section. There are no dividers and so I can see the entirety of the store. The big checkout section is very efficient and the kitsch on the way to the checkout is smart. Also smart is the one person handling changing room to look out for shrinkage.

And compared to like Hollister, Hollister is like going into an intimate cave when shopping for clothes there. Very special feeling.

JCP is like stuck in this uncomfortable place right now. Not high end enough, not low end enough. Also, tech and process improvements now mean that department store clothes aren't substantially of higher quality than discount. TJ Maxx clothes are still very high quality. Hollister and Abercrombie and Urban Outfitters gives a special feeling in the store. JCP is too expensive and doesn't offer a special feeling.

I dunno, like, they even have a big kids section, and yet they are being beaten out by Children's Place.

And looking at the CEO, he doesn't seem like he has the will or charisma to really make changes here. He looks like a nice company man who gets tied up by existing bureaucracy.

chasesfish

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Re: JC Penny stock
« Reply #18 on: May 09, 2017, 05:24:52 AM »
Glad you checked it out - Its pretty easy to tell how retailers or brands are doing based on foot traffic....I've invested in retail a couple of times and they were big mistakes that could have been avoided by looking at traffic.  I'm almost embarrassed to name the positions...

I am also partial to companies who's customers line up to get into the door, like my local Costco every 9:30am on a Saturday.  There must be 100 people there waiting for the doors to open.  Cracker Barrel was also a great investment for me that I still own, the fact people will wait 45 minutes on a Sunday to get a salty breakfast is crazy.   

Apple and Chipotle used to be that way and I missed the run up.

chasesfish

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Re: JC Penny stock
« Reply #19 on: May 09, 2017, 03:10:47 PM »
Dan Evins founded a great concept and really good food with Cracker Barrel, I enjoyed going there as a kid on trips and it was the ultimate hangover food on college (where else serves breakfast at 1:30pm).  I thought the food was awesome 15 years ago.

Later on I had one nearby as the closest breakfast place to meet clients near my office.  I had to be careful about my waist line.

The founder left and it languished for 10 years, food quality, service, management.   Here's an interesting site to read what the activist investor(s) put pressure on them for:

http://www.enhancecrackerbarrel.com/content/letters-to-shareholders.htm

Food is average now, but still draws that Saturday/Sunday wait.  Company is well run because they had to for survival. 

taiwwa

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Re: JC Penny stock
« Reply #20 on: May 09, 2017, 04:02:27 PM »
Glad you checked it out - Its pretty easy to tell how retailers or brands are doing based on foot traffic....I've invested in retail a couple of times and they were big mistakes that could have been avoided by looking at traffic.  I'm almost embarrassed to name the positions...

I am also partial to companies who's customers line up to get into the door, like my local Costco every 9:30am on a Saturday.  There must be 100 people there waiting for the doors to open.  Cracker Barrel was also a great investment for me that I still own, the fact people will wait 45 minutes on a Sunday to get a salty breakfast is crazy.   

Apple and Chipotle used to be that way and I missed the run up.

Yeah, well, there is the intuitive side of you and then there is the logical side. I mean, it is obvious that TJ Maxx is eating JCP's lunch...but JCP is 1/25th of TJ Maxx's value.

But ultimately, it looks like the department store model is dead, and has been dead for a long time. I mean, a mall within a mall is kind of wasted space and maintenance. The only people sustaining JCP are the oldsters who formed habits decades ago and are dying off anyways.

I think JCP should open small Gap-like stores, actually, but then, Gap and Old Navy already exist.

Telecaster

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Re: JC Penny stock
« Reply #21 on: May 09, 2017, 05:42:11 PM »
"It is better to buy a great company at a good price than a good company at a great price."

--Warren Buffett

Yourr metrics are backwards.  You're thinking that since JCP is better than Sears, JCP must be worth investing in.   That is setting the bar low!   Sears is on life support and might not survive.   You should be finding reasons why JCP is an exceptional company that's happens to be currently undervalued.   

Here's the first question you need to answer:  Amazon's share of the fashion market is exploding and JCP's share is imploding.   What specifically has JCP done that will change this dynamic? 



Aunt Petunia

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Re: JC Penny stock
« Reply #22 on: May 13, 2017, 09:01:16 PM »
I don't buy individual stocks anymore, but I am hoping that JC Penney stays around, or they at least keep the men's big and tall line available online. It is the only place my husband can find pants at a reasonable price. Most big and tall sections are actually big OR tall. I also got a good deal on some blinds from there recently. I have no use for their brick and mortar store, other than occasionally returning something bought online.

WhiteTrashCash

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Re: JC Penny stock
« Reply #23 on: May 13, 2017, 09:04:56 PM »
Judging from JC Penney's financials, your best move would probably be using up your JCP gift cards from Christmas ASAP before the utility company turns off their electricity.

OneCoolCat

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Re: JC Penny stock
« Reply #24 on: May 13, 2017, 09:19:55 PM »
Just checked JCP Stock and its down over 15% since this thread was posted 9 days ago.  It could rebound but I wouldn't touch it with a 10 foot pole.  Malls are dying as a whole.

Sears apparently has a lot of assets in real estate but I would avoid that stock as well. 

I think there is going to be a solar energy boom soon.  Solar stocks were declining in value up until the past 6 months or so.  They have remained mostly flat in the past few months and their 50-day moving average is moving in a positive direction.  I don't think there will be a major boom or even a boom at all in the next few months but I do think they bottomed-out.  I think its a good opportunity to start accumulating. 

taiwwa

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Re: JC Penny stock
« Reply #25 on: May 14, 2017, 05:37:58 AM »
Definitely avoid Sears. Eddie Lambert is a moron. Bloomberg did a hilarious takedown of him a few years back. He tried to make Sears into a tech company.

I think JCP is oversold personally. My visits to the local JCP show them to still have somewhat healthy traffic, the stores look well-maintained and selling appliances looks like a smart move.

TomTX

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Re: JC Penny stock
« Reply #26 on: May 14, 2017, 09:19:27 AM »
Just checked JCP Stock and its down over 15% since this thread was posted 9 days ago.  It could rebound but I wouldn't touch it with a 10 foot pole.  Malls are dying as a whole.

Sears apparently has a lot of assets in real estate but I would avoid that stock as well. 

I think there is going to be a solar energy boom soon.  Solar stocks were declining in value up until the past 6 months or so.  They have remained mostly flat in the past few months and their 50-day moving average is moving in a positive direction.  I don't think there will be a major boom or even a boom at all in the next few months but I do think they bottomed-out.  I think its a good opportunity to start accumulating.

Solar is incredibly dynamic and panel prices are still in free-fall. All the Western companies are scrambling to get higher-end products out at better prices: Mostly higher efficiency panels, but you also have Tesla (formerly Solar City) doing the nicest implementation of roof shingles the market has ever seen - shingles that are price-competitive* with a tile/slate roof, but tougher and with a longer lifespan.

China is the 800 lb gorilla in the PV panel marketplace. They already have multiple very-high-volume automated factories with an incredible production ramp rate and economies of scale that will be hard to match, together with a booming domestic market. Soon China's likely to be 5 different, 800 lb gorillas in the PV panel marketplace. They have already started dumping coal for power in a big way ("peak coal" for China was probably 2013, possibly 2014) - and are putting in transmission lines to bring lots more renewable power from the rural sunny/windy areas to the cities.

*Once you consider electricity costs avoided.
« Last Edit: May 14, 2017, 09:21:13 AM by TomTX »

Cache_Stash

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Re: JC Penny stock
« Reply #27 on: May 14, 2017, 10:48:58 AM »
I think it JCP has a rather large downside risk with little upside potential.  The stock is at an "all time low" for a reason.  I would steer clear.  Amazon is eating their lunch.

Until JCP figures out exactly what the general public DOESN"T want to purchase online, then it I think it will flounder.

Amazon already knows the answer to that question.

Pizzabrewer

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Re: JC Penny stock
« Reply #28 on: May 14, 2017, 11:10:25 AM »
JC Penney?  Seriously??

It's a declining company in a declining sector of the economy.  I fail to see any upside to their business model.

I guess that's what makes markets though.  Some see value where others see none.  I'd never invest in JCP, there's literally thousands of better opportunities.

Ocinfo

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Re: JC Penny stock
« Reply #29 on: May 14, 2017, 11:31:50 AM »
I saw this morning that retail employment has fallen more than coal mining in the last 15 years. Some will see that as a good contrarian buying signal and I might be inclined to agree for some companies, however JCP isn't one of them...

I could see some short term bumps for JCP but it doesn't meet my personal requirement that I could buy it and not think about it for at least 30 years. If JCP is still around, it'll almost certainly be smaller than it is today.


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Classical_Liberal

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Re: JC Penny stock
« Reply #30 on: May 14, 2017, 01:45:54 PM »
If I were to make a bet on lagging retail stocks at this moment, I wouldn't bet on any mall-based department stores.  At least a segment of the population is going to want to try on clothing before they purchase, so there will be brick and mortar retailers in the future.  I would guess these are going to be limited to specialty boutiques (upper end), mid range value, and low cost value. 

I have been considering throwing some money at Kohls as their locations are not mall based, men and women with children (think, back to school clothes) tend to frequent this store.  It's an easy place for a guy to get a pair of jeans, polo shit, and pick up his favorite cologne, get name brands at a reasonable value and make sure they fit. Kohls also has very aggressive customer loyalty programs offering many discounts for returning customers. Mid-range value

Target will survive as an upper end Walmart.  Go to any target location and look at the hoard of middle-upper middle class women just "shopping", like you used to see at the mall.  Admittedly, Target has some issues to work out, but I think it will be one of the long term survivors thanks to its huge moat with the very lucrative above mentioned customers. Mid-Range value

Walmart is spending $ to try and beat amazon at it's own game.  Frankly, it's providing decent competition with a great website and free site to store shipping.  I can pop onto Walmart's site and sort items from in-store availability at any location, this is a huge advantage it holds over Amazon in our "on demand" culture. Plus, online grocery shopping with store side pick up for the grocery side.  Prices are very competitive both in store and website, low-cost value

OneCoolCat

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Re: JC Penny stock
« Reply #31 on: May 14, 2017, 02:58:40 PM »
Just checked JCP Stock and its down over 15% since this thread was posted 9 days ago.  It could rebound but I wouldn't touch it with a 10 foot pole.  Malls are dying as a whole.

Sears apparently has a lot of assets in real estate but I would avoid that stock as well. 

I think there is going to be a solar energy boom soon.  Solar stocks were declining in value up until the past 6 months or so.  They have remained mostly flat in the past few months and their 50-day moving average is moving in a positive direction.  I don't think there will be a major boom or even a boom at all in the next few months but I do think they bottomed-out.  I think its a good opportunity to start accumulating.

Solar is incredibly dynamic and panel prices are still in free-fall. All the Western companies are scrambling to get higher-end products out at better prices: Mostly higher efficiency panels, but you also have Tesla (formerly Solar City) doing the nicest implementation of roof shingles the market has ever seen - shingles that are price-competitive* with a tile/slate roof, but tougher and with a longer lifespan.

China is the 800 lb gorilla in the PV panel marketplace. They already have multiple very-high-volume automated factories with an incredible production ramp rate and economies of scale that will be hard to match, together with a booming domestic market. Soon China's likely to be 5 different, 800 lb gorillas in the PV panel marketplace. They have already started dumping coal for power in a big way ("peak coal" for China was probably 2013, possibly 2014) - and are putting in transmission lines to bring lots more renewable power from the rural sunny/windy areas to the cities.

*Once you consider electricity costs avoided.

Very good points.  China is definitely going to continue being a force in panel manufacturing but I don't think Tesla is going to disrupt the market anytime soon.  Telsa's solar roof is still very expensive and I think it will be more of a status symbol than anything.  I have read that the average house would be something like $70k to install a Tesla solar roof but then again it comes with a lifetime warranty.  I also read that while the lifespan of the solar roof is longer than a traditional roof the panels themselves become less efficient each passing year, as all panels do, and I'm not sure whether the lifetime warranty covers panels that become inefficient.  This suggest that the solar roof will look cool but would not bring the consumer nearly as great of a return on their investment.  I am partial as I have a small stake in SunPower but they have the highest efficiency panels in the market, their panels look cool and are easy to install.  They aren't the cheapest panels by any means but when you consider their price and efficiency they may have a winning formula.  Who knows. 

TryingtoFIREinLAnow

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Re: JC Penny stock
« Reply #32 on: May 14, 2017, 04:16:42 PM »
I work in the apparel world at another big fish (8 billion worth says our intranet website today.....) and JC Penney is pretty much an industry  joke as far as this segment of their business.  They recently (past 5 years) made two disastrous choices for design directors and made a failed move upmarket.  Fashion retailers are ALL struggling right now, even the biggies, and JC Penney hasn't been a biggie in a long time......
I would stay far away.......

chasesfish

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Re: JC Penny stock
« Reply #33 on: May 14, 2017, 05:12:56 PM »
Just checked JCP Stock and its down over 15% since this thread was posted 9 days ago.  It could rebound but I wouldn't touch it with a 10 foot pole.  Malls are dying as a whole.

Sears apparently has a lot of assets in real estate but I would avoid that stock as well. 

I think there is going to be a solar energy boom soon.  Solar stocks were declining in value up until the past 6 months or so.  They have remained mostly flat in the past few months and their 50-day moving average is moving in a positive direction.  I don't think there will be a major boom or even a boom at all in the next few months but I do think they bottomed-out.  I think its a good opportunity to start accumulating.

Solar?  Ugh.

I help a retired family member who's a former hippie at heart.  He inherited a nice portfolio and has done a great job of letting the stocks do their thing and forget about it.  The only exception?  He wanted to own some First Solar.

Managed to loose a bunch over four years while the S&P is moving up nicely

OneCoolCat

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Re: JC Penny stock
« Reply #34 on: May 14, 2017, 07:05:18 PM »
Just checked JCP Stock and its down over 15% since this thread was posted 9 days ago.  It could rebound but I wouldn't touch it with a 10 foot pole.  Malls are dying as a whole.

Sears apparently has a lot of assets in real estate but I would avoid that stock as well. 

I think there is going to be a solar energy boom soon.  Solar stocks were declining in value up until the past 6 months or so.  They have remained mostly flat in the past few months and their 50-day moving average is moving in a positive direction.  I don't think there will be a major boom or even a boom at all in the next few months but I do think they bottomed-out.  I think its a good opportunity to start accumulating.

Solar?  Ugh.

I help a retired family member who's a former hippie at heart.  He inherited a nice portfolio and has done a great job of letting the stocks do their thing and forget about it.  The only exception?  He wanted to own some First Solar.

Managed to loose a bunch over four years while the S&P is moving up nicely

FSLR is a long and they have a lot going for them.  They have a very nice balance sheet and if analysts projections are accurate, the solar market is moving out of a draught and FSLR will be in a prime position to gain a lot.  They are also developing a series of high efficiency panels. 

chasesfish

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Re: JC Penny stock
« Reply #35 on: May 14, 2017, 07:09:51 PM »
Not when your cost basis is in the 50's from years ago.

Nothing against the technology...but I learned a long time ago not to invest in electronic hardware manufacturers.   Would rather just own the S&P 500

OneCoolCat

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Re: JC Penny stock
« Reply #36 on: May 14, 2017, 07:20:02 PM »
Not when your cost basis is in the 50's from years ago.

Nothing against the technology...but I learned a long time ago not to invest in electronic hardware manufacturers.   Would rather just own the S&P 500

Ouch, bad timing.  I definitely agree with the index thing.

WhiteTrashCash

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Re: JC Penny stock
« Reply #37 on: May 14, 2017, 08:26:33 PM »
If I had the urge to invest in individual stocks for mall retail stores, I'd probably satisfy the urge by going to a casino and playing some slot machines. I'd probably have the same chance of success with that.

taiwwa

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Re: JC Penny stock
« Reply #38 on: May 14, 2017, 10:07:52 PM »
Visited another mall. Did some more research.

Yeah. Definitely not touching it.

Now that I think about it, the original department stores were located in downtown areas and a big part of their appeal was you could get off the grimy street and into a beautiful air-conditioned luxury store.

The big mall push in the 70's and 80's had them as anchor stores where people were still brand loyal.

Nowadays, people are less brand loyal, because of quality improvements in clothing and because smartphones are the new status symbols.. Strip malls look like they're lower maintenance and can allow for lower prices.

I think retail will survive, actually. Trying on clothes in person is too important. Shipping costs would be relatively high for the value of the goods. Sometimes people just want to be someplace in person.

But retail also greatly expanded from the 1990's onward. I was surprised seeing all of these high end shiny retail stores popping up, especially in the Bush years. So what is coming is a long-overdue "correction".

Classical_Liberal

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Re: JC Penny stock
« Reply #39 on: May 15, 2017, 07:13:39 AM »
Now that I think about it, the original department stores were located in downtown areas and a big part of their appeal was you could get off the grimy street and into a beautiful air-conditioned luxury store.

Now what to do with these malls? and the REIT's like Simon Property Group that own them?  FYI Simon is the #1 company  held by vanguards REIT fund to those indexers in the audience, somewhere around 7-8% of fund value.

How much would it cost to convert those things into retirement communities?

TomTX

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Re: JC Penny stock
« Reply #40 on: May 15, 2017, 07:14:59 AM »
I saw this morning that retail employment has fallen more than coal mining in the last 15 years. Some will see that as a good contrarian buying signal and I might be inclined to agree for some companies, however JCP isn't one of them...

Not really a great comparator - despite the recent disinformation campaign, coal mining employment has been going down since the 1950s. Little to do with Democrats or green energy, it's primarily the mine owners automating the process that killed the vast majority of coal jobs.
« Last Edit: May 15, 2017, 07:17:41 AM by TomTX »

chasesfish

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Re: JC Penny stock
« Reply #41 on: May 15, 2017, 01:49:04 PM »
Now that I think about it, the original department stores were located in downtown areas and a big part of their appeal was you could get off the grimy street and into a beautiful air-conditioned luxury store.

Now what to do with these malls? and the REIT's like Simon Property Group that own them?  FYI Simon is the #1 company  held by vanguards REIT fund to those indexers in the audience, somewhere around 7-8% of fund value.

How much would it cost to convert those things into retirement communities?

For me, REITs are the one asset type that I buy individual stocks in.  The REIT by definition already owns a diversified portfolio of properties and charges less than a 10% management fee to run their company (since they must distribute 90% of income).

I'm long on EPR and STAG.  I like industrial REITs right now, we're replacing retail space with industrial as a country

Abo345

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Re: JC Penny stock
« Reply #42 on: May 15, 2017, 11:21:45 PM »
I heard wetseal and Bebe stocks are killer deals right now, maybe you should buy some....oh wait...

But seriously, I went to Jc penny recently while walking through the mall to get to the parking lot. It's like a fucking geriatric facility. Completely filled with 50+ year old women clipping coupons wearing bedazzled visors and old men shopping for underwear. Very depressing. i don't really see a turn around on the way.

MightyAl

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Re: JC Penny stock
« Reply #43 on: May 16, 2017, 04:50:54 AM »
JCP went down a hole and never came back after a new CEO tried to change its entire strategy and failed miserably.  He rebranded JCP and redid almost all of their stores to be like apple stores, which isn't strange since this is where he cam from.  A good friend of mine did make a bunch of money off of this but he was a contractor that specialized in retail fixtures. 

After this rebranding they lost their most faithful customers to the likes of TJ Maxx and others that followed the coupon and sale strategy.

Stay far, far away from JCP as they are heading towards oblivion.

smedleyb

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Re: JC Penny stock
« Reply #44 on: May 16, 2017, 06:47:45 AM »
Buy JCP the day SHLD goes bankrupt, for a trade.

Long term, not a winner.

Car Jack

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Re: JC Penny stock
« Reply #45 on: May 16, 2017, 07:30:34 AM »
JCP, like Sears some time ago went to a "no more sales" model, thinking that like Wal*Mart, they would attract smarter shoppers who don't fall for the marked up, then marked back down on sale tricks.  That fell flat on both counts.  Why?  I have two potential answers.  One is that there are shoppers (like me) who watch prices on a relatively big item and wait for the big sale that's like a real big sale.  Sears used to do this twice a year and the lines out the door to pick up the compressor or floor jack or whatever because it really was a good sale kept the cash registers going.....but plenty of people were like me and went in to buy that one on-sale thing and nothing else, so they didn't get the "attach" of higher margin sales.  I still have my 2 ton Craftsman jack that I bought 35 years ago.  The other answer is that shoppers are really stupid and don't pay attention to what the prices were.  That dress that "was $219" is now on sale for only $59, in reality is usually $49, but people are too stupid to pay attention or are impulse buyers who pick it up and think they're "saving" all this money.

Today, the first type of shopper is everyone.  Who else besides me stands in a store, looking on their smartphone to see if the item is cheaper elsewhere?  Heck, I was buying a new washer/dryer at sears a few months ago and found, while looking at them in the store that I could use an online coupon, join a club for free shipping and instead of using my sears card, could use my citi card for price rewind.  I went home and bought the same items from my couch from sears online and saved maybe $50 and got free shipping.  Then Citi found that they dropped the prices and gave me another $40 back.  The second type of shopper who is stupid or impulsive will always be stupid and impulsive but with teens and tweens more able to find that Holister T shirt for $3 less than JCP down at Macy's, they'll take a 2 minute walk, save the money to buy a pretzel or Starbucks somethingorother.

ChpBstrd

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Re: JC Penny stock
« Reply #46 on: May 16, 2017, 10:32:09 AM »
Now that I think about it, the original department stores were located in downtown areas and a big part of their appeal was you could get off the grimy street and into a beautiful air-conditioned luxury store.

Now what to do with these malls? and the REIT's like Simon Property Group that own them?  FYI Simon is the #1 company  held by vanguards REIT fund to those indexers in the audience, somewhere around 7-8% of fund value.

How much would it cost to convert those things into retirement communities?

Apartments would be a tough conversion. You're talking drilling through concrete slabs to run bathroom and kitchen drains. Then you have a bunch of windowless apartments, which sounds cheerful. Then there's the question of who pays for maintenance and heating/cooling the massively oversized common area. Then you're also maintaining a 500 car parking deck for 100 cars.

A mall that was in good shape was torn down in my city. They replaced it with a Target and a mixed-use development.

I think the malls that aren't torn down outright will become offices, just as more companies shift to working from home, and that's one reason why I don't invest in office REITs either.

I've even considered shorting mall REITs against apartment REITs with a long-term options strategy.

chasesfish

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Re: JC Penny stock
« Reply #47 on: May 16, 2017, 11:43:33 AM »
Its just funny reading about malls...I drive by a ghost-mall slowly being torn down on my 2.5 mile commute to work each day.  That shouldn't be a story, except it sits on dirt worth tens of millions of dollars in Dallas-Fort Worth and it still couldn't survive as a mall.

We're just in a long-term trade of commercial real estate, retail for industrial based on shopping habits.  The younger generation generally would rather go to brunch with friends then go to a mall and buy shit they don't need.  When you "need" something, there's are just more convenient ways to get it.

taiwwa

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Re: JC Penny stock
« Reply #48 on: May 21, 2017, 08:05:56 PM »
I've been going to JCP so much thanks to my interest in the stock I've even picked up a few clothing items. And for the price, quality is very good. I'm a little old fashioned so I don't care for any of the slim cuts or whatever. Jcp clothing is perfect in my book.

And I've wandered through Macy's for comparison. Macy's had this amazing mirror polished floor, had more high end stuff like smart watches, and much higher prices. Too high.

So my local JCP just opened up their appliance section...and it was very underwhelming. It is basically the same LG and Samsung appliances you can get from Lowes or Best Buy. Nothing unique here.

I think that earlier, before the iPhone, retail overbuilt because the investors who drive decisions would do "research" by going to their local mall. It is really easy, much easier than going to a factory floor, having to talk with management. Nowadays investor-class people buy Apple products, buy stuff from Amazon, watch Netflix, etc, and so they drive up stock prices of stuff they personally use.

Which is a way of saying that perhaps tech is overpriced and JCP is oversold. While I wasn't impressed at all by their appliance offering, it looks like CEO Ellison is moving JCP more in a Home Depot direction. Appliance sales are an obvious one, but also JCP will be offering home remodeling services. Also they have started up a hotel supply channel.

chasesfish

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Re: JC Penny stock
« Reply #49 on: May 22, 2017, 05:34:51 AM »
I remember Ellison speaking last summer at a lunch event I was at, he said appliances were something customer surveys said they missed.

I think he's pulling appliances and home services out of his Home Depot playbook from the time he spent there.  I agree with them shrinking their footprint, they're pulling out of a ton of small markets.  Who knows if they make it or not...