Saturday, December 1, 2012

Why J.C. Penney Is Poised to Keep Plunging

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 (NYSE: JCP  ) has received the dreaded 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

$3.9 billion

Industry

Department stores

Trailing-12-Month Revenue

$14.5 billion

Management

CEO Ronald Johnson (since November 2011)
CFO Kenneth Hannah (since May 2012)

Return on Equity (average, past 3 years)

(0.8%)

Cash/Debt

$525.0 million / $3.0 billion

Competitors

Kohl's (NYSE: KSS  )
Macy's (NYSE: M  )
Sears, Roebuck and Co.

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

On CAPS, 33% of the 977 members who have rated J.C. Penney believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, theheitz, tapped J.C. Penney as a particularly tough turnaround situation:

I've grown a little bit on this stock and management, but it looks like too big of a restructuring is necessary to keep this company afloat. Too many legacy problems (IT backbone specifically) that should have been overhauled earlier. Not sure if they can see their vision to the end with the way cash is evaporating, especially with a weak holiday season.

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