Over the past five years, we have watched the beleaguered Department store J. C. Penney company Inc. (NYSE:JCP) to make its way steadily down. Shares of jcp for almost twice its value in April 2017, it begs the question – how much lower is possible with a penny stock go?
In many cases, reduced as this leads to a great buying opportunity, especially when the company works on a turnaround plan. Here it is with the stock JC penny.
JCP stock had its fair share of difficulties over the past few years, and the company is still working to dig myself out of mountains of debt, however, the latest quarterly results showed the Department store begins to show signs of life.
Most importantly, the CPJ was able to refinance some of them huge pile of debt, who will buy the firm a little more time to organize a successful turn. The company was burdened with more than $ 300 million in debt, which came into force in 2019 and 2020, but this year, CPJ issued 400 million dollars of debt in order to repay these loans.
A new $400 million will be paid in 2025, which gives the company more time to do their business on the rails, but the loan also comes with a steep 8.625% per annum.
This refinancing is necessary for the JCP, but it is not a guarantee of success. Jc penny will still have to pay his new, more expensive loan when it comes due and in order to do that the firm needs to be on a much firmer footing.
Stealing Market Share
Jc penny com in the third and fourth quarters to impress investors, and rightly so – the company saw same-store sales rose 1.7% and 2.6% respectively. When you look at retailers in General, these figures are not absolutely blow the competition out of the water, but they are enough to offer stability and they are definitely a huge step forward for shares of JCP.
One of the main reasons for this improvement was the impending death of Sears holdings Corp. (Nasdaq:work). In the quest to capitalize on the hardships of Sears, JCP has stepped up with offers of home appliances, which seems to be bearing fruit. As sears disappears from the sale of household appliances, PSS and picked up that market share.
The same is true with proposals toys JCP. Jc penny made a push in selling children’s toys, at the same time that toys R us closed its doors.
So the rotation takes place?
There is no simple answer as to whether or not the JCP was successful still in circulation efforts. On the one hand, the company’s efforts to improve its offer in the store to create an atmosphere that will attract customers appears to be working – being whom to tell. However, on the other hand, the company is still grappling with ultra-low margins.
While the fourth quarter saw less promotional activity cutting into profits, online sales continue to seriously affect profit. On this front, jc penny stuck between a rock and a hard place. In order to increase its presence on the Internet, jc Penney should focus on online sales, which are inevitably less profitable than in-store sales. However, on the other hand, JCP really can’t afford the sales growth at any price, as some of his peers.
Should I buy JCP stock?
As a speculative play, shares of JCP may be a money maker – however, it is important to understand that there is a huge amount of risk, because the future of the company is far from certain. As my colleague Lawrence Meyers put it, “how to play the stock J. C. Penney’s as a trade.” He recommends to buy somewhere below $2.70 and selling in increments as the share price increases.
I agree with Meyers in this respect – if you approach risk and You are willing to put your chips on the line that the kind of speculative trading is definitely worth considering.
However, for me the history of the JCP is simply not convincing enough to believe. I’m not too impressed with the company’s increased profitability and because I think that stronger rivals like home depot Inc. (Ticker NYSE:HD) will ultimately dominate the device market and toy sales don’t seem particularly strong life Line. With this in mind, I will monitor turnaround efforts of the JCP from the side.
At the time of this writing, Laura hoy not to take a position in any of the above securities.