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A big turnaround is coming to JCP and |
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the turnaround is about Ron Johnson. |
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Released on Saturday, September 10, 2011, 8:00 AM ET
Pittsburgh, PA (SpeculatingStocks) - Earlier this year, in June, it was announced that Ron Johnson will be joining JC Penney's as its new CEO.
Ron Johnson comes from Apple. He was the Senior Vice President of Retail there and reported directly to Steve Jobs. According to his bio on Apple's website, "Johnson leads Apple's retail strategy and is responsible for its overall execution and performance." Under Johnson's retail leadership, Apple opened over 300 retail stores.
Johnson will assume the CEO position at JCP on November 1st, 2011 and has already joined JCP's Board of Directors, effective as of Aug. 1, 2011.
Back in June, on this news, JCP reached $35.37 a share. JCP is now trading at around $25.00 a share, so it has tailed off.
JCP is trading at a market cap of only around $5.4 billion and PE of only around 15. We believe both are low based on a company that had sales of $17.7 billion and net income of $389 million in fiscal 2010.
JCP hasn't been the most glamorous company and has faced stiff competition, but we believe that its mojo is about to come back.
JCP has a book value of around $18 a share, so it is trading at only around a 40% premium to its book value.
Interesting enough, JCP has adopted a "poison pill" provision that would go into effect if any shareholder bought 10 percent or more of the stock.
A big turnaround is coming to JC Penney's and the turnaround is all about Ron Johnson. We would not be surprised to see JCP have a meteoric rise over the next five years from its current $25.00 price level. JCP is a significant bargain both in the short-term and long-term.
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