J.C. Penney Sell Call Leads Sell-Side To Top Spots In 2014

January has already come and gone; which means, we have our first recipients of the 2014 TipRanks Hall of Fame and Hall of Shame awards! While the new year offered a chance for some analysts (and companies) to wipe the slate clean, others struggled through the transition into 2014. While some companies’ stocks were fluctuating, some analysts were able to capitalize on their financial ups and downs, while other analysts did not fare as well.

Hall of Fame

The Hall of Fame is reserved for an analyst who is able to demonstrate great knowledge, resulting in a call with great returns, that might have been missed by others. But this month not one, but three analysts have risen to the top, proving their ability to successfully foresee stock outcomes, thus earning a place in the TipRanks Hall of Fame.

At the beginning of January, J.C. Penney Company, Inc. (NYSE:JCP) announced that the company was “pleased with its performance for the holiday period, showing continued progress in its turnaround effort.” However, Wells Fargo & Co (NYSE:WFC) analyst Paul Lejuez, Belus Capital analyst Brian Sozzi, and BMO Capital analyst Wayne Hood, were not convinced by J.C. Penney Company, Inc. (NYSE:JCP)’s statement and their lack of substantial proof of a new financial direction.

Hall of Fame J.C. Penney Company JCP
J.C. Penney Company JCP

Paul Lejuez maintained his SELL rating on J.C. Penney Company, Inc. (NYSE:JCP) with a  price target of $4-5 despite the company’s optimistic outlook. Paul noted, “the calendar artificially boosted November comps and we expect a big slowdown in December. Seems like we got it. We now estimate December comps were flat (previously assumed up low-single digits to mid-single digits).” Paul’s recommendation earned him +26.6% over S&P-500. Paul has a 4.9% average return over S&P-500 and a 67% success rate of recommended stocks.

Brian Sozzi also recommended SELL J.C. Penney Company, Inc. (NYSE:JCP) and said that he was “not expecting anything magical” from the company. Because J.C. Penney Company, Inc. (NYSE:JCP) could not keep up double-digit sales gains, Brian felt he had to advise to SELL J.C. Penney Company. Brian earned +26% over S&P-500. Brian is ranked 60 out of 2381 analysts and has a 5.7% average return over S&P-500 and a 59% success rate of recommended stocks.

Wayne Hood also recommended SELL J.C. Penney Company, Inc. (NYSE:JCP), stating, “We see the company having access to adequate liquidity into FY2014, but still see EPS losses on a very leveraged balance sheet into the foreseeable future.” Wayne’s recommendation also earned him +26% over S&P-500. Wayne has a +9.0% average return over S&P-500 and a 70% success rate of recommended stocks.

Congratulations to Paul, Brian and Wayne for providing valuable information that investors can trust!

Hall of Shame

Unfortunately, not every analyst makes it into the Hall of Fame, and this month analyst Jonathan Eckard earned himself a spot in the Hall of Shame for his January recommendations to BUY Intercept Pharmaceuticals Inc (NASDAQ:ICPT) and Sarepta Therapeutics Inc (NASDAQ:SRPT).

Jon E

In early January 2014, Intercept Pharmaceuticals Inc (NASDAQ:ICPT), the biopharmaceutical company focused on developing, and bringing to market, therapeutic treatments for chronic liver diseases, announced that they had stopped the drug trial of an experimental liver disease treatment (obeticholic acid) due to its overwhelming success in patients. The company planned to start another late-stage trial in the second quarter and was making plans to file for market approval of the drug for treatment by the end of January.

Jonathan said, “revenue from obeticholic acid could top $5 billion a year because the drug may become standard treatment for NASH [nonalcoholic steatohepatitis].” However, soon after Jonathan’s recommendation Intercept Pharmaceutical’s CEO Mark Pruzanski remarked that his company may need some outside assistance to bring the drug to market. Researchers also found that the drug increased bad cholesterol in some patients, resulting in the need for further testing. Jonathan ended up losing -27.1% over S&P-500 and earned an average -3.9% over S&P-500 and a 36% success rate of recommended stocks. 

Unfortuantely, that was not the only bad call Jonathan made that month. Jonathan recommended SELL Sarepta Therapeutics Inc (NASDAQ:SRPT) while the drug development company awaited a decision from the FDA on a particular drug. Jonathan noted, “we do not anticipate that FDA will reverse its view that eteplirsen’s ph 2 data is not sufficient to file. We expect eteplirsen’s approval will be delayed until at least ‘17. We view the path ahead as being risky, lengthy and expensive and the recent strong stock rebound on hopes for early filing is overdone.”

However, later in the month the drug did demonstrate continued stability in Muscular Dystrophy patients, as was the hope, and the stock surged 50%, leaving Jonathan with -26.1% over S&P-500.

January may not have been Jonathan’s best month, but he has the whole year to try and make it into the Hall of Fame.

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