Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

J.C. Penney Company, Inc. (JCP): Billionaire George Soros Reaches For a Falling Knife

Times have been tough at J.C. Penney Company, Inc. (NYSE:JCP) recently. The stock is down about 60% over the last year, and CEO Ron Johnson- who was backed by billionaire activist Bill Ackman, head of large J.C. Penney Company, Inc. (NYSE:JCP)shareholder Pershing Square- recently departed the company after his turnaround plans were unsuccessful. In fact, in its last fiscal year the $3.6 billion market cap department store experienced a 25% decrease in revenue, including a 28% fall in the fourth quarter of the year, and operating losses of about $1 billion even after adding back restructuring and management transition charges. J.C. Penney Company, Inc. (NYSE:JCP)’s stock price also may have been hit by speculators assuming that Pershing Square will be forced to sell shares in order to maintain its short position in Herbalife (NYSE:HLF). Check out more stocks Pershing Square owns.

Now billionaire George Soros’s Soros Fund Management has reported a position of over 17 million shares in J.C. Penney Company, Inc. (NYSE:JCP), or 7.9% of the total shares outstanding. We track quarterly 13F filings as part of our work researching investing strategies (we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by 18 percentage points per year on average), and so we can see that Soros’s fund did not own any shares at the beginning of this year. Find Soros’s favorite stocks from the end of December. The stock is currently up about 7% on the news, as the market reacts to Soros’s vote of confidence and some shorts cover.

SOROS FUND MANAGEMENTJ.C. Penney Company, Inc. (NYSE:JCP) had been widely shorted, with 37% of the float held short, as many bears expect the company to be forced into bankruptcy. We’ve mentioned that there were steep operating losses last year, before even considering the retailer’s interest expenses; cash flow from operations was also slightly negative. Wall Street analysts are expecting something of a delayed turnaround: $2.40 in losses per share this year, and then under $1 per share in losses for the fiscal year ending in January 2015 (with a small number of analysts even calling for profitability). We’ve already named Pershing Square as a major shareholder in J.C. Penney Company, Inc. (NYSE:JCP)- Ackman’s fund looks to own close to 20% of the company as of the most recent data. Our database of filings shows that Glenview Capital, managed by Larry Robbbins, increased the size of its position by 64% during the fourth quarter of 2012 to a total of 7.3 million shares (find Glenview’s favorite stocks).

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.