FACE-Off WILL THE RETURN OF ITS FORMER CEO LIFT SHARES OF BEATEN-DOWN RETAILER J.C. PENNEY?

摘要

I can go back 20 years and count on one hand the number of retail companies that have destroyed as much shareholder value as J.C. Penney has. None of them recovered. The average EVA margin-a company's true economic profit net of operating and capital costs-was 1.6% for U.S. companies last year, and within retail the median was 1.4%. J.C. Penney's was -14%. J.C. Penney makes Hewlett-Packard look good, even Sears-and that's hard to do. Kohl's and Macy's are not going to just sit back and let J.C. Penney win over their customers. Even if Penney hits revenue targets, at a recent price of $14 the stock is still overvalued based on EVA profits. This company is destroying economic profits at historic proportions. Long-term investors should not go anywhere near the stock.