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Should This Competitor Worry About J.C. Penney Company, Inc. (JCP)?

At this point, most investors understand that the last year or so has been a bad one for J.C. Penney Company, Inc. (NYSE:JCP).

Should this Competitor be Worried about J.C. Penney Company, Inc. (JCP)?

Last month, we talked about hedge fund manager William Ackman selling his roughly 18 percent stake in the company.

Yesterday, we brought you a piece on Vornado Chairman and Chief Executive Steven Roth resigning from the company’s board.

With all this in mind, there are still people who believe that Penney is going to get back on track. There are still investors who believe that the retailer will turn things around, eventually regaining its former glory.

Are you one of these investors? Or do you feel that it is better to put your money into one of the company’s competitors that is performing at a higher level right now?

Who is J.C. Penney Company, Inc (NYSE:JCP) Targeting?

In a recent article published by Yahoo Finance, Keith McCullough, founder and CEO of Hedgeye Risk Management, talks about one retailer that better keep its eye on Penney: Kohl’s.

He noted, “If we look for the number one overvalued stock that’s lined up straight in the cross-hairs of J.C. Penney coming back from the dead, it’s Kohl’s.”

This may be hard to believe for those who are invested heavily in Kohl’s, being that the popular retailer has had great success as of late. While McCullough goes on to add that Kohl’s is not under pressure from Penney just yet, it could happen at some point in the near future.

Of course, there is a big difference between saying that J.C. Penney Company, Inc (NYSE:JCP) will close the gap on Kohl’s and actually doing so.

McCullough noted that there was roughly $800 million in market share for Kohl’s to pull away from Penney, however, his company’s research notes that it only grabbed up $500 million.

The competition between Penney and Kohl’s is about to heat up, with McCullough adding that the “cat fight is not going to be pretty.’

Both companies have the same approach, selling the same types of products.

Right now, Kohl’s is out and front and J.C. Penney Company, Inc (NYSE:JCP) continues to struggle. If Penney is able to get back on the right track in the near future, especially with the holiday season on the way, let’s get ready for some fireworks.

Here are just a few of the hedge fund managers who continue to invest in Penney: Patrick Mccormack, Larry Robbins, Christian Leone, and Chase Coleman.

Recommended Reading:

Two Stocks Sinking in Monday’s Sea of Green

Apple Can’t Survive as a Premium Brand

Why Google Needs More Data

Disclosure: none

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