For disclosure, I own 4000 shares at $9.50/sh. I'm not in love with the stores or the stock, but know how short hedge funds can relentlessly put out "disaster" articles, get them printed by a complicit media, and perhaps create an oversold condition. So yesterday, I did my own homework, spending 90 minutes in a traditional Phoenix, AZ mall, talking to employees, observing shoppers, etc. Here is what I heard/saw in various departments:
* Disney Section: Sales lady said the Disney area had always done well, through all of Penny's decline, and continued over the holidays, 14% more sales than last year on Black Friday (all of them knew their numbers)
* Teen/Mens Section: Enthusiastic and handsome 21 year old salesman said they did well, up 30% over last year. I also watched several groups of teenage boys picking out shirts, pants, and not necessarily off the high discount racks.
* Jewelry: General ear rings, bracelets....lady said they did well. I saw 2 soon to be newly weds, ready to pick out rings. Surprisingly, there was a 60-70 year old man picking a higher cost ring in that area. Not much discounting there.
* Floor person guiding people near the escalator. She told me "business was booming over the weekend.
* Store Manager: Caught her walking down the aisle, hands full of paperwork. She told me the store did very
over the weekend.
* Finally, I went to the high, high discount area, saw some ladies picking out those $2.97 items. However, I went into Macy's and Dillards, and saw similar eople in their high end discount areas. Don't know how to differentiate that.
I'm not trying to pump the stock. I just know that some of these "JCP is going bankrupt" article writers, have never left their desks, and spent time in a Penny's store as I did. For what it's worth.
In the early 2000s, I owned ATT Wireless (cost basis $6, thousands of shares), one of the most hated stock in the market. When the FCC declared portability, meaning that owners could swictch carriers and keep their numbers, they were the only company who had major problem (honestly it was like the Obamacare site).
Politicians, especially Chuck Schumer, made great political hay on TV standing in front of frustated New Yorkers, driving the stock into the $4s. Shorts were all over this, and I was 25 cents from stopping out when ATT announced they were up for sale, and conducted an auction, and Bell South bought them for $15/share.
It was unbelievable, and anaylysts still downgraded the stock saying the deal would not go through. They probably scared many shareholders out in the $9s by doing this, but wife and I tripled down in the $10 range, and then the greatest short squeeze occurred when Bell South validated the deal, and we walked away with one our biggest paydays. Not saying this will happen with Dendreon, but it can.
Remember when Cramer got disillusioned with Mel Karmazin a few years ago. He dedicated quite a bit of time telling everyone to get rid of the stock. He'll kiss Goldman Sach's _sses anytime they ask.. Sirius mgt will take advantage of this downgrade, buying back huge amounts in the mid $3s, and will then surprise everyone in future quarters.
Sirius similarity with Taser. I own Taser since $5, now $15 in a quarter. Same thing last earnings, company announces huge buybacks at $9/sh, analyst didn't like last earnings, sold down to $8/sh, then after a few announcements, the stock went to $17. Sold a lot there, plus sold calls on the balance. Upgrades/downgrades....they are all intended to make the brokerages money, shake the shares out of your hands. However, do some selling on big run-ups, then sell calls to make some money, etc.
Disclosure: I hold 20,000 shares of Sirius since a $1.09 cost basis. Sold 5000 at $4.14/sh (cost basis was $.93/sh) on those shares. Yes...listen to Cramer and the Goldman boys.
I bought 15,000 shares last Friday, and 3500 today. What I'm told by my broker, Charles Schwab, is that the numbers anyone sees on these kinds of stocks via public domain, even the Schwab site, are not accurate. it's just the nature of this grey over the counter market.
Is it not possibly logical that Unilever's loss could be P&G's gain. After all, we are selling in the same geographies with competing products. Why is it i assumed that P&G sales will fall as well.
When the hedge funds do this to you because they are shorting the stock, management should take the company private. There's nothing you can do about this, analysts in bed with their own investors. Ironically, look at bank earnings, slowing mortgage business, layoffs, reserves, litigation, still off balance derivative business, and what do all their "talking head" analysts say "look through it, banks are in good shape, buy, buy, buy". It's a cartel.
Cramer and that entire CNBC crowd were the ones saying that no one would ever buy "big box" stuff at Best Buy again. People just shopped there and ordered ALL Their stuff on Amazon. That drove the stock to $11, now it's $44. Ooops.....were we wrong? Sorry.
Best Friend....no it's not the hedge funds. From Bernstein's analyst,, who should know "They beat expectations but I think buyside expectations were quite a bit higher," said Bernstein analyst Stacy Rasgon. "This thing is hedge-fund hotel right now. Nobody's in it for the long term."
I remember buying 50,000 shares at $.09, and selling them between $2.50 and $4. Was something wrong with that? I guess I should have been short. And, it wasn't mgt's incompetence that took them to 5 cents, it was the terrestial broadcasters who hooked up with politicians like like Ed Markey from Massachusets who tried to block the merger of Sirius and XM, and over what, supposedly high rates to subscribers. Oh yes, $14/month which is about 20% of all those little fees that you see all over your cable bill which no one can explain. I used to think in 2008, with all the problems in the world and economy that the most important think on Markey's mind was that "big" subscription price for satellite radio that was going to break every household's budget.
Do you notice how expectations are always high for tech companies? No matter what they deliver or forecast, they were just a little below "analyst expectations". However, note the bank earnings reports over the last month, mortgage business going down, all of them laying off 2500-3000 employees, litigation, and all those off-balance derivatives on their books which they don't have to report. However, no matter what they report, all the analyst call them up with a buy, say ignore the bad news, "they are iimproving". Watch the Fast Money boys, all ex-Goldman, bank/brokerage guys. Ignore the news.......buy, buy, buy the banks. The economy just can't go forward unless the banks go up.......a self-fulfilling prophecy.
I hate Goldman and the rest of these guys...
like Buffett, bar the door, the mother of all squeezes, and this will pop into the teens. I started my Xmas shopping last week, live in the Phoenix area, many malls and shopping centers. People are in Pennys as much as any other retailer. Remember......50% of people don't own stocks, and considering more are women (where their husbands might do the investing), probably even more of these shoppers know absikytekt nothing about Penny's market issues. They do what they do........shop, and they'll buy in Pennys as much as anywhere else. Furthermore, the short hedge funds and the complicit media succeeded in the biggest misinformation campaign ever against Pennys and succeeded in taking this below $7/sh. I'm glad because I bought 2000 shares there, and another 2000 this morning. I will sell calls occasssionally as I wait. Remember Best Buy taken down to $11, the end of the Big Box stores....everyone buys 60 inch TVs and even their toilets on the Internet.....bulls___t! Now, it's $44/sh.