Seeking Alpha

Star Weekly

Star Weekly
Send Message
View as an RSS Feed
View Star Weekly's Comments BY TICKER:
Latest  |  Highest rated
  • J.C. Penney Can Make A Profit During 2014 [View article]
    One of the question to Ken Hannah should be:

    "If the company is doing so well and you are a part of that turnaround, then why are you leaving JCP?"

    Under safe harbor provision, the company can hedge about its statement: "we believe ..." and when it does not materialize, oh well, conditions are different than when we made our projection.

    Now that SEC closes its investigation to JCP's conflicting press report a few months ago (ref: secondary offering), the company is doing again for not being transparent. Notice the non answer from Ken Hannah regarding the 2B liquidity. They doing the cookie cutter approach: using some vague rosy projection, and yet not being transparent.

    The stock is up 24% just this morning on heavy volume due to short squeeze. Individual investors, whether long or short should not take any action either chasing the stock or covering the shorts. Today is not a normal day to make decisions. Most of today's trades are based on greed or fear.
    Feb 27 12:11 PM | 1 Like Like |Link to Comment
  • How Bulls Have Moved The Goalposts As J.C. Penney Falls Short Of Expectations [View article]
    @Qniform, I think we can agree that we wish that JCP does not face this terrible situation which naturally not our doing. Nevertheless, we all like to make money, and when opportunity knocks we should answer, and currently, I see that this is the way to profit at this time.
    Feb 24 09:18 AM | Likes Like |Link to Comment
  • How Bulls Have Moved The Goalposts As J.C. Penney Falls Short Of Expectations [View article]
    There is more than one way to skin a cat. Your timing was perfect. I am in the opinion that the more people make money, the better the economy is and we all share the prosperity as well. So, congratulations.

    On a side note, I am not good in timing the market. While some people have the knack of always buying low and sell high, I settle for buying high and selling higher or shorting low and covering lower while once a while get lucky buy low and sell high. It goes without saying that I have taken my lumps of losses along the way.
    Feb 24 09:16 AM | Likes Like |Link to Comment
  • How Bulls Have Moved The Goalposts As J.C. Penney Falls Short Of Expectations [View article]
    House money is a casino term which means your winnings. The put writers took my money but is exposed to a much larger risk than the premium received.
    Feb 24 09:08 AM | Likes Like |Link to Comment
  • How Bulls Have Moved The Goalposts As J.C. Penney Falls Short Of Expectations [View article]
    As I have posted, I made decent money in shorting JCP. My position was closed while I was away on a 15 day cruise. Otherwise, the profit would even be larger. You are quite correct that there are no shares to borrow, so that I cannot reenter the market through the same route.

    My Bayesian projection is that JCP has 30% chance reporting good quarter a few days from now versus 70% chance of giving poor results. From a simple calculated expected value under probability theory, and considering blowing the house money, it is easy to risk 10% of my profit to control 10,000 shares of JCP by buying March 22 $5 put at $ 0.35. If JCP stays above $5 come third Friday in March, oh well, that's house money. But if JCP reports poor earnings, wow, for every $ 1 drop below $ 5 means $ 10K.

    This is not a recommendation for anybody to follow my trade. Take note again that the fund use is house money.
    Feb 23 11:13 AM | Likes Like |Link to Comment
  • J.C. Penney: No Borrow At Any Price. A Primer On Shorting [View article]
    If you are a beginner, try to get 2 week free Investor Business Daily (IBD) which gives you a booklet what CANSLIM (Proprietary of William O'Neal) means. The idea is to cut your losses and as flip said, an investor should have his/her ego in check. Everyone makes mistakes here and there and suffer losses, but let those losses be contained and ride on the winners. If you are comfortable with IBD, just invest a few dollars by subscribing to that business daily which lists stock along with the relative strength, acc/dist etc.

    As you correctly stated, one of the deadly sin is Greed. A low pirce stock does not mean it is cheap. Good Luck to you.
    Feb 22 11:01 AM | Likes Like |Link to Comment
  • How Bulls Have Moved The Goalposts As J.C. Penney Falls Short Of Expectations [View article]
    Who are the folks buying JCP stocks? Major hedge funds have left and no major HFs come in to replace them. Friday's volume is less than 9 M shares compared to average volume of slightly below 30M/day. Seems that little folks are the ones entering into new position or increasing their stakes considering JCP is a "cheap" stock in the mid 5, and dreaming that it will go to 45. Even the magician Chris Angel won't be able to do that trick.

    A few days more, the picture will be clearer, i.e. if Ullman is not doing his usual spin again like saying "we are pleased with the results"

    http://bit.ly/1fjf5Xd
    Feb 22 10:51 AM | Likes Like |Link to Comment
  • How Bulls Have Moved The Goalposts As J.C. Penney Falls Short Of Expectations [View article]
    "That could describe where JCP stock is going though, right? Into an abyss?"

    Even some of the bulls admit that JCP will go BK. The question is when. I think the sooner the better. Right now JCP is practically owned by the creditors who are breathing on the neck:

    The need to restructure is imminent. Get a new guy to replace Ullman who has proven that he is an incompetent CEO and a liar (remember secondary offering). Ullman is not a turn around guy either.

    Therefore, shareholders, you are the last in line getting your money, if there is any left, and even then, your share has been diluted by 84 million shares. Are you waiting to be the last person to turn off the lights? Forget about Ullman and Hannah who will speak next wekk. They have their golden parachutes.
    Feb 22 10:29 AM | 1 Like Like |Link to Comment
  • A Few Reasons Why I Am Bullish On J.C. Penney [View article]
    While you are dreaming that JCP will see $ 45 this years, those who bought puts are laughing and clapping their hands.
    Feb 21 10:10 AM | 2 Likes Like |Link to Comment
  • How Bulls Have Moved The Goalposts As J.C. Penney Falls Short Of Expectations [View article]
    "The clerks and managers I've spoken with at 6 different JCP locations are saying that old customers are returning"

    JCP caters to old customers, mainly baby boomers. Look, baby boomers are mostly retired people, they spend less on clothing and more on travel. OTOH Macy's caters to generation "X" and "Y" based on the trendy fashion collection.

    Ullman is not the right person to steer the ship. That's why he was replaced by RJ, and now he is back doing the wrong thing over again and some bulls expect get different results.
    Feb 21 10:02 AM | 1 Like Like |Link to Comment
  • How Bulls Have Moved The Goalposts As J.C. Penney Falls Short Of Expectations [View article]
    Not only where are the new business coming from, also where are the new buyers of the stock coming from when major hedge funds have closed their positions and are unlikely coming back.

    More supply and less demand hence the stock price will drop. One of the suggestion is to issue more shares. How much will JCP get if this is the route they are going to take. The dilution will definitely drive the shares even lower.
    Feb 21 09:58 AM | Likes Like |Link to Comment
  • How Bulls Have Moved The Goalposts As J.C. Penney Falls Short Of Expectations [View article]
    "no stock has ever gone to infinity and none ever will."

    Infinity is not a number.
    Feb 21 09:52 AM | 2 Likes Like |Link to Comment
  • J.C. Penney: No Borrow At Any Price. A Primer On Shorting [View article]
    "I have given up on JCP for now"

    Good for you even if it means taking some loss. Here is the word of the wise in investing:

    "The decision that you made, given the data, given your knowledge and experience and the urgency to fix the problem, was the right one - even if the outcome was not what you want" - Star Weekly

    Just move on.
    Feb 21 09:49 AM | 2 Likes Like |Link to Comment
  • J.C. Penney: No Borrow At Any Price. A Primer On Shorting [View article]
    We probably will know soon enough why Ken Hannah is leaving. Hannah and (of course) Ullman will answer questions on Web Feb 26 regarding last Q performance.
    Feb 20 10:03 AM | Likes Like |Link to Comment
  • J.C. Penney: No Borrow At Any Price. A Primer On Shorting [View article]
    Here is one good news for the bulls:


    UPDATE: Citi Initiates Coverage on J.C. Penney with Neutral Rating, $6.50 Price Target
    12:39p ET February 19, 2014 (Benzinga)

    Coverage was initiated on JC Penny Co. Inc (NYSE: JCP) with a Neutral rating and $6.50 price target of $6.50 at Citigroup Wednesday morning.

    Oliver Chen, analyst at Citi, believes JC Penny, “has a number of initiatives in place to bring customers back to stores and improve margins” such as restoring private label brands, home department improvements, and return to promotional selling.

    What is concerning to Chen is “merchandise execution risk and potential liquidity concerns.” Specifically, “Cash & revolver availability $1.7bn in 3Q (incl. 3Q cash of $1.2bn) & fiscal 2013 liquidity ended in excess of $2bn. We forecast JCP's liquidity profile could slightly worsen by YE14 to $1.6-$1.7bn given that we model FCF use of $350mm on rev. growth of +4-5% & capex $300mm (vs. avg $800mm).”

    In summary, Chen is encouraged by JC Penny's products and same-store sales improvement, but the overhanging liquidity concerns are too big of a question mark and justify a Neutral rating at best on the stock.

    Shares of JC Penney are trading down about 1 percent to $6.05 at last check.
    Feb 20 09:47 AM | Likes Like |Link to Comment
COMMENTS STATS
161 Comments
123 Likes