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Why Is Jcpenney Successful

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J.C. Penney (JCP) has not been returning a lot of profit for its shareholders ever since it dropped from its high pedestal years back. Is capital growth gone for this iconic American department chain? Will $20 or $30 be reached any year soon? This article will further delve into that question.

I've covered J.C. Penney many times before on Seeking Alpha.

An iconic J.C. Penney store

(click to enlarge)

Source: examiner.com

The picture above resembles an iconic J.C. Penney store during the thriving years of the U.S. economy. Now, decades later; this picture has lost resemblance in comparison to today's appearance of J.C. Penney. J.C. Penney is in trouble, and the shareholder and the american customer are aware of it.

Hindsight is 20/20

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Penney survived many American recessions and thrived during a variety of decades where it did the right thing from a business perspective: earning money. Beginning 80s, J.C. Penney disbanded most of its automotive parts. Beginning 00's, the department store sold its insurance division to Dutch finance giant Aegon and exited the drug store business soon after. All this was to focus more on its core business, the retail industry. Was that a good …show more content…

Penney rose significantly?

Source: Ycharts

During the inflated years of the last bull market (04-07), which was the intro into one of the biggest financial meltdowns in history, J.C. Penney climbed significantly; being a strong retail player in many shareholders portfolios. Unfortunately, we all know what happened to J.C. Penney straight after the financial meltdown. It got into severe trouble and with Ron Johnson as replacement CEO, the J.C. Penney ship was about to sink. Fortuitously, as always, J.C. Penney steered away at the right moment and made sure immediate bankruptcy never came close.

What's different this time around?

Between the internet bubble and the start of the bull market, J.C. Penney had a period of around 4 years where its share price remained relatively stagnant.
5 years ago J.C. Penney's share price was around $15. Today's value is roughly half. 5 years of stagnant flotation, what will be the catalyst that will propell J.C. Penney higher?
My first thought is that this stagnant share price might remain floating around $8 for quite a while. This, as I believe J.C. Penney this time around exhibits serious lower fundamental strength as it did before it reached it's extravagant values back in

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