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Why J.C. Penney Is Poised to Keep Plunging

By Brian D. Pacampara, CFA - Apr 9, 2013 at 1:00PM

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Market-lagging returns could be written in the stars for this stock.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, department store operator J.C. Penney (JCPN.Q) has received an alarming one-star ranking.

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

J.C. Penney facts

Headquarters (founded)

Plano, Texas (1902)

Market Cap

$3.5 billion

Industry

Department stores

Trailing-12-Month Revenue

$13.0 billion

Management

CEO Myron Ullman CFO Kenneth Hannah

Return on Equity (average, past 3 years)

(7.7%)

Cash/Debt

$930.0 million / $3.0 billion

Competitors

Kohl's
Macy's
Sears Holdings

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 36% of the 1,047 members who have rated J.C. Penney believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, sikiliza, reacted to the recent ousting of CEO Ron Johnson:

And so the curtain falls on yet another attempt at reviving a dying horse. I have never been a big fan of those perpetual sale outfits including Jos. A. Bank. In a way, I think Ron Johnson tried to do the right thing by pricing things right and not having to first overprice and then discount to satiate the bargain-hunting ways of clearance sale addicts. That said, [J.C. Penney] was dealing with enormous perception issues and I couldn't picture myself walking into a [J.C. Penney] store while surrounded by the Macy's and [Nordstroms] of this world.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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Stocks Mentioned

J. C. Penney Company, Inc. Stock Quote
J. C. Penney Company, Inc.
JCPN.Q

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