JCP (Update)

J.C. Penney Company Inc.

Consumer, Event Driven/Special Sit


Presented:09/10/2014
Price:$10.77
Cap:$3.28B
Current Price:$0.13
Cap:$0.04B

Presented

Date09/10/2014
Price$10.77
Market Cap$3.28B
Ent Value$7.67B
P/E RatioN/A
Book Value$6.28
Div YieldN/A
Shares O/S304.84M
Ave Daily Vol17,130,000
Short Int28.15%

Current

Price$0.13
Market Cap$0.04B
J. C. Penney Company, Inc., through its subsidiary, J. C. Penney Corporation, Inc., sells merchandise through department stores in the United States. The company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings, as well as provides various services, including styling salon, optical, portrait photography, and custom decorating. As of August 5, 2014, it operated 1,100 stores. The company also sells its products through its Website, jcp.com. J. C. Penney Company, Inc. was founded in 1902 and is based in Plano, Texas.

Please note, this is an update to Short – J. C. Penney Company, Inc. (JCP), which was originally presented on 3/3/2014. As well, this idea was updated again on 3/20/2015 and can be read here: Short – J. C. Penney Company, Inc. (JCP).
Publicly traded companies mentioned herein: Restoration Hardware Holdings Inc.(RH), Williams-Sonoma Inc. (WSM)

Highlights

At its current enterprise value of $7.7 billion – $3.3 billion in equity value and $4.4 billion in net debt – JCP is currently trading at nearly 6 times the $1.3 billion in EBITDA the company generated in 2010, its last good year. Yet last year, JCP posted a -12% EBIT and -7% EBITDA margin (pro forma). Meanwhile, cap-ex in 2014 will be about $250 million, which the presenter regards as far below minimum levels given that the company spent about $350 million in cap ex in 2003 – a year in which it was similarly on a strict budget. By comparison, average cap-ex going over the past decade is about $700 million annually. JCP in this context certainly appears to be under-spending.

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Idea Discussion

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