J.C. Penney (NYSE:JCP) earnings for the fourth quarter are out, with the stock absolutely exploding upward 25% on the news that the company was profitable in Q4 -- at least on paper.
In the lead story from Thursday's Investor Beat, host Chris Hill and Motley Fool analyst David Hanson break down the report and look at J.C. Penney's prospects from here. David notes that a tax asset can be credited as the main reason for the profit this quarter, and that the report was still terrible. While same-store sales were up 2% from last year, 2013 was such an awful year for the company that it wasn't a high benchmark to beat.
Some investors have been looking at Penney as an extremely cheap value play today that only needs to improve slightly for investors to turn a profit. David, however, just sees too many headwinds here for him to want to be involved.
Two retail stocks blowing the competition out of the water
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.
Chris Hill, David Hanson, and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.