Strong Earnings Lead J.C. Penney Company, Inc. (JCP) To Big Gains; Is The Comeback Finally Nigh?

Despite the strong performance year-to-date, J.C. Penney Company, Inc. (NYSE:JCP) has had difficulty mounting any kind of a comeback since Bill Ackman, once its largest shareholder, famously gave up his board seat and dumped his massive stake in the fall of 2013 after the stock’s under-performance and management’s unwillingness to implement some of his vision. Ackman bought the stake at more than $20 per share and ended up losing hundreds of millions of dollars on the investment, chalking it up as one of his worst ever. J.C. Penney shares still trade at just $8.52 today, down by about 37% since Ackman left the stock.

Other smart money managers have been able to get in at lower price points however and hope to profit from their investments. Jim Simons’ Renaissance Technologies just made a big investment in the second quarter, adding 7.87 million shares to its holding, lifting it to over 11.03 million shares. Alexander Mitchell’s Scopus Asset Management opened a large new position during the quarter, of 5.73 million shares. Those are two massive investments, considering Simons’ previous holding of just 3.16 million shares was previously the top one in our database. Thus it looks like funds will end up being quite bullish on J.C. Penney in the second quarter, and so far so good: the stock is now up by more than 3.3% in the third quarter and the company appears to be heading in the right direction.

Thus, we believe the time may be right to take up a long position in J.C. Penney Company, Inc. (NYSE:JCP), as its long-awaited comeback finally begins to take flight.

Disclosure: None