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J.C. Penney (NYSE:JCP) CEO Ron Johnson is out after 17 months. During his tenure, the company's share price went from around $30 to roughly half that. Johnson, who had been a key player at Apple (NASDAQ:AAPL) once upon a time, instituted a range of changes at J.C. Penney - changing the brand to JCP, doing away with coupons, introducing an everyday low price policy.

Johnson's strategy ultimately didn't work. The changes were too abrupt; it is even rumored that Johnson put all these pricing, marketing and merchandising plans into play without doing the proper research. Traffic declined and slowly things at the department store chain started to revert to the old ways of high markups and deep sale discounts while the company fought to gain ground and forestall a legal battle with rival Macy's (NYSE:M) over its ability to sell Martha Stewart housewares.

Now, Myron "Mike" Ullman, Johnson's predecessor, is returning to the helm and the management staff is working to undo many of the changes Johnson put into place - reportedly trying to have coupons back in place in time for Mother's Day. But time is limited for J.C. Penney. "Analysts at Credit Suisse said the company has until about Memorial Day to firm up many of its holiday orders, and the company is in the middle of an expensive program to revamp its home department," writes the Wall Street Journal.

"On Tuesday, credit ratings firm Standard & Poor's warned that Penney's cash flow is declining and could force the company to seek fresh funds."

The jury is still out as to whether reinstalling Ullman to the helm is a good idea - and whether any efforts Ullman introduces could be successful at this point. After all, it was the direction in which Ullman was leading the company that prompted major shareholders like activist fund manager Bill Ackman to push for his dismissal and ultimately Johnson's hiring to the role of CEO. Moreover, many of Ullman's key people went out the door with him. Bringing him back is a tactic that is understandably questioned.

Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, is definitely not on board. "Mike may be a friendly face to some. However, I think Ullman offers the kiss of death wrapped in a smile," said Sozzi. "Ullman is someone I have dubbed Mr. Promotion. One has to believe that heading into the holiday season, he will ramp up discounts to lure back shoppers. Why is this bad? Simple, J.C. Penney has already plowed TONS of shareholders funds into shop in shops, so an environment of Ullman's 1980s promotional strategy sets the stage for poor returns on shop in shops investments right out of the gate."

I agree wholeheartedly. However, there are still those who are bullish about the company - insiders.

J.C. Penney may be going through a lot of changes, but insiders at the company are not abandoning ship. If anything, they seem quite enthusiastic that the company's stock price will rise.

Senior VP and Controller Mark Sweeney acquired 24,752 derivative shares on April 3, which would give him the right to buy shares in J.C. Penney at a price of $14.43 through April 2, 2023, but that was really small potatoes compared with his peers. Also on April 3, Executive VP and CFO Ken Hannah acquired the right to buy 123,762 shares in the company at an exercise price of $14.43. Executive VP and General Counsel Janet Dhillon proved to be even more bullish over the prospects at J.C. Penney, buying 141,443 "right to buy" shares in the company with an exercise price of $14.43.

Sure, J.C. Penney has plummeted over the last couple years - but good investing generally does mean buying in low, and the market certainly seems encouraged that Johnson is out.

Over the last two days, J.C. Penney's share price has gone from a low of $13.55 to trade at $14.96 - that's a 10% boost in 24 hours. Analysts are putting the company's one-year target estimate at $15.39. If they are right, that would be less than a 3% return over the next 12 months - of course, buying in this low, there could be a case for a long position here on a much shorter term as momentum builds over Johnson's dismissal.

Source: Insiders Not Abandoning Ship At J.C. Penney