Since JCP was a big loser in 2013, I expected a lot of tax loss selling at the end of the year to off-set gains in other stocks... It didn't happen... Perhaps all the weak hands are already long gone and people who hold JCP stock really expect it to go a lot higher and don't want to miss the move up when it happens.
Last few days have been strange with stock price almost not moving at all and trading in 1 and 2 cent range all day long...I somehow get the feeling that there is lot of accumulation going on by some hedge funds setting themselves up for 2014. I will not be surprised if a bunch of hedge funds disclose big stakes and squeeze the shorts big time...It could happen...Check out Volkswagen short squeeze, considered the mother of all short squeezes.
I've been doing some ground research at the local JCP stores and i see that the traffic is comparable to other stores..It will be interesting to see if this trend continues in January...When i visited the store sometime in October the store was shockingly empty..I am not expecting to see that anymore...Good word of mouth from the holiday quarter should result in more traffic over the coming quarters..
Overall, i expect the stock to ATLEAST double in price in 2014...This is a classic market psychology and sentiment play... There are dumb shorts who think they can just predict stock price by whipping out their little calculators and throwing around some numbers...The market DOESN'T CARE about numbers as much as it cares about sentiment...Look at TWTR stock for example...If market gets a confirmation that JCP will survive and thrive then it will look 2-3 yrs down the line...the immediate revenues/earnings doesn't matter much.. Of course, this is too hard to understand for the little short brains :-)
Likewise, if JCP gave away the store like I think they did, it will be obvious to EVERYONE (including thick-skulled shorts) that JCP cannot achieve growing sales without sacrificing profit margins. I look for JCP to close out 2014 in bankruptcy and with its shares trading under $5.00.
, if JCP gave away the store like I think they did, it will be obvious to EVERYONE (including thick-skulled shorts) that JCP cannot achieve growing sales without sacrificing profit margins.
I'm not any more privy to the sales or margins of JCPenney than any other poster on this board, but I note that the "Hype and Hope" crowd are failing to address a few issues - -
1. If other brick and mortar stores suffered declining sales and margins - what did JCPenney do that made them stand out from the crowd.
2. If sales are better than anticipated - they will ALWAYS be leaked by "Un-named sources" - nothing as of yet !!
3. Given the abysmal figures from last year - any sales increase of less than a spectacular number will be of little use unless accompanied by a substantial increase in margins - - - - it's a lot harder to produce a 33-35% margin than some of our board "Pumpers" realize - - - if only you could just snap your fingers and make it happen -
JCP shows very good growth in sales....that results in the share price going significantly higher because let's face it...how many companies do you know that went bankrupt while their sales were increasing?
At this point, even if they need more cash, they can always issue more stock when the share price is much higher...the dilution will be lot less...The next step is to focus on margins...If every frickin retailer can get 35% margin, JCP can too..just a matter of time!!