JCP Stock Hits New Lows: Is it Time to Take Action?

JCP stock

There was a time when JC Penney (NYSE:JCP) used to be one of the biggest department stores in the world, but over the past half a decade or so, the company has been in the middle of a financial meltdown due to its debts.

Over the course of the previous three years, the JCP stock has lost as much as 90% of its value, and although it attracted some investors as it hit new lows, the stock continued to drop. Recently, the company has instituted plenty of new measures in order to turn around the business. However, the question remains whether the bottom has been hit.

Poor Earnings

At this point of time, JCP stock is trading below $1, and amidst all that, JC Penney’s revenues for Q2 2019 declined by 7% to hit $2.62 billion. Although the revenue decline was in line with Wall Street expectations, sales dropped by 9% as well. However, the appointment of new Chief Executive Officer Jill Soltau has seen the company go on an aggressive move to eliminate its low margin products. In the place of those products, JC Penney is trying to introduce a new line of products that could boost the company’s bottom line.

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Additionally, the company has also shut down 15 stores, along with nine stores that focus on Home and Furnishings. These are bold moves and could result in the company going on a different trajectory soon.

At the time of writing, JCP stock is up 2% at $0.63.

Earlier this week, a new development could be the clearest indication that the company is now on a path of redemption. It has now emerged that the chairman of JC Penney, Ron Tysoe, has purchased as many as 100 million shares in the company recently. The transaction was revealed in a federal filing, and it can only be a positive trigger for anyone who is interested in the company’s stock. Management generally buys more of the stock if they believe that it is going to go up in the long term.

JCP stock has been falling consistently since the beginning of this year and has corrected 65% from its February peak price of $1.90.

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Featured image: DepositPhotos © Banoart

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