Taking a look at a recent 8-K filings, we can find the company’s most recent numbers. JC Penney reported positive net income for fiscal 2016, a $514 million increase compared to the prior year. Operating income grew $292 million in fourth quarter and $484 million for the full year. Also, the company achieved $1 billion in EBITDA for full year, which is a $477 million improvement. There seems to be life and growth with this company, and the fact they are still improving should be a promising sign for current investors.
Now, taking a look at the chart using the monthly time frame, we can see that price is at the bottom of the recent trading range. Right now, I would be looking more at the fundamental data and numbers to ensure the company continues going in the right direction. In this situation, the price is so low that once the company begins picking up steam, the stock price will fix itself. Don’t ignore the chart though, because using both can help you formulate a well-rounded opinion.
How important is JC Penney's Liquidity
JC Penney
financial leverage refers to using borrowed capital as a funding source to finance J C Penney ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. JC Penney financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to JC Penney's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of JC Penney's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between JC Penney's total debt and its cash.
Is JC Penney valued sensibly by the market?
Risks
For a complete list of company cited risks, take a look at the most recent 10-K filing. For now, here are a couple to keep in mind while doing your research. Frist, you have to ensure that the company is going to keep adjusting with the times, because if not, they are going to end up being the next Sears and eventually go out of business. Secondly, the company has to adjust the online retail movement, because people are saving money by shopping online and it gets delivered right to their door. Also, keep an eye on the macro economy because if that begins to slow, it will certainly has an adverse affect on the company and could slow their growing numbers.
Conclusion
This company might be on to watch and see if it can get back to their former glory. There are certainly many other companies that do the same so be sure to compare them and find which one gives you the most value. If after your own research you still have questions, consult an investing professional as they can help point you in the right direction.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of J C Penney. Please refer to our
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