J. C. Penney Company, Inc. (JCP) A Stock to Buy on Insider Confidence?

The J. C. Penney Company, Inc. (NYSE:JCP) bulls won the day, but the reality is that the 0.03 points or 2.21 percent advance gave very little definitive technical indication of where the stock could be headed next. On 06 December, the shares traded at $1.39 with a light trade volume of 7.711 million shares. After opening the session at $1.33, the shares went as high as $1.4 and as low as $1.31, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $438 million and now has 314.9 million shares outstanding. J. C. Penney Company, Inc. (JCP) stock has lost -11.46 percent of market value in 21 trading days.

JCP stock has a trailing 3-year beta of 0.8, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.47 a share in the trailing twelve months. The stock’s value has fallen -56.01 percent year to date (YTD) against a decline of -57.88 percent in 12 month’s time. The company’s shares still trade -70.74 percent away from its 1-year high of $4.75 and 33.01 percent up from 52-week low of $1.04. The average consensus rating on the company is 3.5, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

J. C. Penney Company, Inc. (JCP) will probably climb 0.72 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $2-month high price target. This represents a whopping 43.88 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $1.5, which represents a return potential of 7.91 percent when compared to the closing price of the stock of $1.39 on Thursday, December 06. The lowest price target for the stock is $0.5 — slightly more than -64.03 percent from JCP’s current share price.

History has shown that shares in J. C. Penney Company, Inc. have gone down on 22 different earnings reaction days and are predicted to add 0.09 percent when the company reports upcoming earnings. Investors will get their next glimpse of JCP’s Q4 earnings on February 27. Analysts are forecasting revenue to suffer decline of -5.8 percent to $3.8B in the fiscal fourth quarter, while earnings are seen soaring by nearly -73.68 percent to $0.15 per share. It earned -$0.52 per share, better than the -$0.56, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.73B, worse than the $2.81B analysts expected. Earnings are estimated to increase by -536.4 percent this year, 22.9 percent next year and continue to increase by 0 percent annually for the next 5 years.

Let’s take a look at some insider activity at J. C. Penney Company, Inc. (NYSE:JCP) and see the pattern. The earliest insider trade took place on 08/22/2017. Davis Jeffrey A. gathered a total of 50 thousand shares of company at average share price of $3.62. The total for the purchase was set at $181 thousand. After this transaction, the EVP, CFO account balance stood at 72.65 thousand shares. The stock lost -61.6 percent since that insider purchase. On 08/22/2017, Teruel Javier G, Director, purchased 135.14 thousand shares at a price per share of $3.64. This added 491.89 thousand shares to the insider’s fortune and the stock saw a -61.81 percent retreat in value since the news became public. This transaction left 518.97 thousand shares in the Director account.

On 08/21/2017, Director Brown Paul J performed a purchase transaction worth $90.5 thousand. This purchase at $3.62 each has added 25 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded -61.6 percent decrease since the transaction was reported. The insider now is left with 68.12 thousand shares remaining in the account. Ellison Marvin R, who performs the Chairman and CEO job, bought 100 thousand shares for $348 thousand. The acquisition occurred on 08/18/2017 was priced at $3.48 per share. The share price plunged -60.06 percent since the reporting date. Ellison Marvin R now left with a stake of 2.85 million JCP stock worth $3.96 million after the insider buying.

The stock is currently hovering around the first support level of $1.33. Below this, the next support is placed in the zone of $1.28. Till the time, the JCP stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 47.2 on daily chart, which may remain a cause for concern. If the price breaks below $1.28 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $1.42 mark may result into a pull-back move towards $1.46 level.

Further, it is sporting a 0.04 on the Price-to-Sales ratio. Compare this with the industry average P/S of 3.23. 34.5 percent is the gross profit margin for J. C. Penney Company, Inc. and operating margin sits at 0.8 percent. Along with this, the net profit margin is -0.6 percent.