J.C. Penney Company, Inc. (JCP): Bonds Vs. Equities

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As I mentioned before, I believe that JCP could represent a good debt opportunity given its real asset base and currently compelling yields of over 9% (on JCP’s debt maturing in 2017). But, as en equity investment, I do consider that other names (such as Dillard’s or Macy’s) carry better value for investors. Even if its ‘New JCP’ venture is working well and the potential upside is considerable, there are better risk adjusted investment propositions within the space. Considering his outstanding investment track record, Mr. Ackman will very probably be proven right. That said, I would chose to stay far from JCP’s shares. If you just buy bonds, you can enjoy some share of the potential upside if things go right for JCP while securing a nice and steady income stream.

The article JCP: Bonds Vs. Equities originally appeared on Fool.com and is written by Federico Zaldua.

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