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Why Invest in J.C. Penney?

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  • Description

    Morningstar retail analyst Paul Swinand weighs in on holiday retail sales.

  • Duration 3:52
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Lauren cyber sales passing the twenty billion dollar mark in the first month of the holiday season but can cyber continue to win in the holiday wars.

Morningstar retail analyst polls when they.

Joins us and he likes JC Penney which has been this much maligned please explain yourself sir.

-- to be -- they're they're actually lagging in online just as bad as they are in the physical world.

But what other things -- that.

Everybody's lined up against them right now they -- assuming that things are getting worse and this talk -- history with that November was really disaster for them.

I actually thought I saw a real turn -- pop during the holiday weekend on Black Friday.

And the other thing is that.

They could do just less worse and the stock could really -- from where it is it's it's very very cheap right now okay and -- started due this fall back got to ask you did you.

Like this stock when I was at 42 dollars in February 2012 because it's at seventeen now.

Both stock gals aren't supposed talk about past performance but I've got a 38 dollar fair value on it and -- hired by pictures -- around 22 dollars.

So on value stocks yes it is key to buy them with a big enough margin of safety that.

You you're not to upset if it goes down more so okay our by trigger that are out wanted to but the fact did think to 161718.

After that -- talk about your brick and mortar winners so far this holiday season.

You've got Macy's and Kohl's and a third one.

They'll look at Kohl's has been also laggard but I think their online sales are actually picking up they said that they did about 50% growth over the holiday weekend just past.

And again it's one of those situations where.

-- a laggard but they just a little better the stock is actually very cheap got you Macy's has been marching current go ahead.

My bases in March -- -- steadily but they're really kind of the that -- really getting the most juice out of the improvement in the on line.

So there -- they've been accelerating their online sales and they're at a much bigger base than everybody else I think.

The consumers really seeing an advantage in having me BC's national footprint.

And that big inventory of a big -- like Macy's OK and also like Norstrom -- when your holiday winners along with culture.

Yeah I didn't -- is a great operator and they've got the toughest compare.

Because they turned -- earliest in 20099.

In the holiday period.

But the same -- is rare to get that stock at discount.

I'm not.

Terribly.

You know I'm not terribly bullish that they're gonna knocked the lights out for the holidays.

But to get that stock at any discount to fair value is actually usually a good long term holdings I think that's -- to be worth five or 10% more for just had a stock symbol was an OR seven.

And your holiday losers Tiffany and Nike -- for us.

Well as you know Tiffany and I care both companies that I that I love for the long term and I love the brands I love the management's there's a lot of good stuff going on on the product side.

Nike is a little bit undervalued but there they're actually at the end of a strong product cycle.

Although -- I would say actually like it tedious even less this back as more highly valued and they're coming off a huge year in.

The European championships in soccer and -- the Olympics.

Tiffany is one again I love the company.

But the stock ran up to almost 65 dollars in anticipation that they could get back the 7480 that they were last here okay it's still just about fairly valued right now all right so you know in other gonna do all right we got -- -- one last question of all those retail stocks pick one.

-- -- -- -- -- -- -- Are you don't the president yet that case for JC Penney and that risk level okay I'm.

I also the -- present day -- there and Macy's is Kennametal.

We're going to what went on JC Penney -- -- bold call the Euro dollar all that I am a part okay.

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