Obviously that has got my attention. I wanna know what's goin on.
A 30 minute review of news, company website, SEC filings, this message board, and a few other sites reveals nothing that would justify a 20% drop in 20 days. I'll look at their SEC filings some more.
This seems like a decently run utility. Very punctual with its dividend - which is quite attractive at this level. A utility usually does not have great secrets or skeletons in closet - like a bank or a bio-tech. Many analysts can sniff practically everything.
Here's the only thesis for a 20% drop in 20 days:
One or two (even three) large holders decided to trim their stake in FE - and take the money elsewhere. To the tune of 40-50M shares needed to be unloaded. That is about 10-12% of float. Spread the selling over several days to keep price levels from collapsing too much. If 3 large shareholders sold - they may not even have to file with SEC - as each could be less than 5%.
Now - why did large shareholders sell? why now ? and how come 2 or 3 at the same time ?
Answer may be - "Performance Anxiety".
All the largest FE shareholders are conservative funds. In 2013 - if a fund is up 20% - it is considered a laggard, a snail, an under performer. Yep - even average joe's have 25-40% returns while some have 60%+ profits. I speculate many of the conservative funds gained around 10% so far in 2013 - if that.
And look at FE - it has hovered around 38-44 all year. No appreciation.
The conservative funds are finally wanting a piece of this bubble - and several indications are emerging that a parabolic move up has not yet happened.
Trim their stake in FE now - and maybe in December. Put that money in hot sectors - technology, housing, even banking. Some window dressing may have already started.
My summary is: Yes - don't expect dramatic appreciation from FE. The divy looks safe (mgmt may reduce it to keep it between 4-5% ). This is a good stock to have in retirement account.
JCP stock halted the slide and startid movin up after dollar lady article came out.
Loved her logic why JCP is headed to "notional value of $1"
I can't find that article no more. Looks like she pulled it.
Does anyone have connections with dollar lady - ask her to write another one !
Ackman ??? Shorties ??? Anyone ?
There are 3 things in earnings report comin out Nov 20 wednesday.
Sales is known to everyone. Recently improving comps are the reason stock went up from $6.50 to $9.00.
Next is Margin. Did JCP make any money from the sales? or did it lose less money from previous quarter. Yes - nobody is expecting a profit. Everyone wants to know is JCP paying $12 when they sell some stuff for $10 ? or are they paying $20 to sell stuff for $10.
The expectation is low here. If the burn rate is reduced. That's positive. If it's stabilized - that's negative. If it increased - holy %^&$#
I am expecting JCP to show reduction in burn rate.
Last is Guidance for 2014. Smart and winning companies are cheerful, believable and sure footed when providing guidance. Others - can mess it up.
I don't expect JCP to ace this - but will come out with - "challenges lie ahead, it will take time, but we can do it".
SO - earning report really will not move stock much !
There are two forces that will continue to keep this stock volatile:
One - the shorties. Any bad news gets magnified and any good news gets muted.
Two - the bucket of sleaze named Goldman. It's really hard to read them because they are so corrupt. On one hand they have suggested to JCP - 'Hey - you are under boatload of debt, your store square footage is burning more cash than you can earn - just file bankruptcy - a bankruptcy of convenience. Yes - it will hit your suppliers, it will hit your shareholders and it will hit your debtors. But who cares!"
On the other hand - they manage to sell JCP stock at $9.65 and may even run up the stock to margin call the shorties.
If I was not in JCP - I'd stay away and play other hot stocks.
For me - I have it - therefore I sold half and replaced with Feb calls (20%) and freed up cash (80%) for other opportunities.
simple answers -
$1.75B loan - reduced to $1.2B. About $300M more than planned. yes last 3 months dint make as much revenue as planned.
$810M equity raise - all bought at $9.65 within a day. show me one weblink, one piece of proof that shows Ullman made those statements. After 3 days of intense research all I could find was - two reporters (anonymous) stating to a 3rd person that they heard him make that assertion in a meeting that apparently had no voice, video recording. I say fabrication - just like the $1 price target BS opinion recently by a paid writer.
No profit. They are not doing well with their strategy. In the process of unwinding the Apple guys cataracted vision.
positives for JC penney -
$2B in cash to withstand the shorties and focus on their profit plans
Ability to get more money & credit (ignore the twitter rumors)
International brand recognition
Recognizing past mistakes and courage to admit em and honestly working to fix em.
Only 2 real negatives for JCP besides the usual challenges of a turnaround.
first negative - JB ackman
that recent one dollar article really unwound everything for me.
This is a coordinated attach by JB ackman and of course his JB cronies. He is angry. He is angry at JCP management and when he sold at 13 bucks - he vowed to recover is $13 loss by driving the company BK.
The bogus twitter rumors - the motley fool, seeking alpha articles, yahoo .25 cent posts, no name analyst opinions - it all begins to make sense.
... and the other negative - JCP management letting the stock fall 50% within days of JB ackman exit.
I don't underestimate these negatives - but this has nothing to do with ability to turn around a branded and recognized retail operation.
This company obviously has very solid brand recognition - both in USA and abroad.
But so did Eastman Kodak - whose shareholders got wiped out earlier this month.
Main culprit at Kodak was Perez - their CEO. A pompous guy.
JCP is generally headed the same way - CEO fought with ackman, quickly secured a poison pill and with more need for financing - pretty much rules out takeover talks.
The best option for JCP still is buyout. It's good for employees, it's good for bond holders, it's good for creditors, its good for suppliers and yes - it's good for shareholders.
With successfully managed companies flush with cash - even a chinese or korean or mexican conglomerate can bid on JCP. $23 a share is very easy.
However, the CEO has big ego (Ullman). He thinks he can be a hero and turnaround the co himself. Usually such pompous donkeys are seldom successful. Kodak's perez or Yahoo's yang are recent examples.
A selfish and 3rd tier CEO also keeps serious bidders away - nobody wants to acquire a company in a hostile environment.
I expect an activist investor to make a move (even with the 10% cap). Retail's best bet will be to support this entity and not sit and watch.
As malicious JCP CEO may become - he won't be able to tarnish brand image too badly.
HAIL BULLARD !
Thanks for your responses guys - hail kibbles (?) got my SPY 170 in a day.
I closed most of my shorts with profit - SPY, CAT, GLD and others
Still have NFLX and some GOOG, TSLA - these stubborn stocks bucked the trend today.
I'll wait till the debt ceiling circus before resuming long positions. Hey I might get better prices.
What do you think about gold or silver
I bought lots of puts - SPY, GOOG, NFLX, TSLA and on and on
Now having second thoughts - market not ready to retreat - only goin higher.
dang - even when bernanke passes wind from his behind - woosh the market shoots up.
Wall street Journal touts - "BIG QUANTITATIVE EASING WITNESSED TODAY. MARKET UP 300"
Only lookin for SPX to retreat to 1700 - any chart meisters see this ?