Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, department store operator J.C. Penney (NYSE:JCP) has received the distressing two-star ranking. While one-star stocks have been the worst performers, our data has shown that two-star stocks still lag the market by a significant margin and should be approached with caution; conversely, highly rated stocks have outperformed the S&P.

With that in mind, let's take a closer look at J.C. Penney's business, and see what CAPS investors are saying about the stock right now.

J.C. Penney facts

Headquarters (founded)

Plano, Texas (1902)

Market Cap

$4.78 billion


Department Stores

TTM Revenue

$19.12 billion


CEO Myron Ullman, III (since 2004)

CFO Robert Cavanaugh (since 2001)

Net Income Growth (average, last three years and TTM)

1.2% and (31.7%)


Kohl's (NYSE:KSS),

Target (NYSE:TGT)

CAPS members bearish on JCP also bearish on:

Sears Holdings (NASDAQ:SHLD),


CAPS members bullish on JCP also bullish on:


Goldman Sachs (NYSE:GS)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, some 36% of the 157 All-Star members who have rated J.C. Penney believe the stock will underperform the S&P 500 going forward. These bears include goofyfool and kidderpeabodyny, both of whom are ranked in the top 5% of our community.

Last month, goofyfool kept the bearish case Foolishly simple: "Recession, margins getting squeezed, debt and inventories accumulating."

In a more recent pitch from last week, kidderpeabodyny follows that bearish line of reasoning:

... this will be a disaster year for retailers. Sales figures dont mean much when your profit margins are negative...and even with all their discounts, their sales are off. [Wal-Mart (NYSE:WMT)] is an exception but JCP, Sears, Target and Macys will take a bath! Expect MANY more bankruptcies in the retail group.

What do you think about J.C. Penney, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 125,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Sears Holdings and Wal-Mart are Motley Fool Inside Value picks. Apple is a selection of Stock Advisor. The Fool's disclosure policy always gets a perfect score.