CEO Ullman Invests in J.C. Penney Company, Inc. (JCP) Stock


J. C. Penney Company, Inc. (JCPAnalyst Report), under a regulatory filing, declared last Friday that Chief Executive Officer (CEO) Mike Ullman has invested nearly $1 million in the company’s stock.

Ullman bought 112,000 shares of J. C. Penney at $8.95 per share. Following the news, shares of this department retailer rose 3.6% to close at $9.19 yesterday.

J. C. Penney has been in troubled waters for quite some time now due to waning revenues and higher losses. The company has not shown any signs of recovery in the recent past. In fact, the stock has lost more than half of its market value (55.9%) year to date, which resulted in its elimination from Standard & Poor’s 500 index.

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The company’s lackluster performance under former CEO Ron Johnson weakened its financials. Following the failure of his ambitious turnaround strategies, J. C. Penney’s board replaced Johnson with Ullman to bring the company back on growth trajectory.

J.C.Penney, under Ullman, has taken several strategic initiatives to drive traffic and conversion and better compete with peers such as Macy’s Inc. (MAnalyst Report), Target Corp. (TGTAnalyst Report) and Kohl’s Corp. (KSSAnalyst Report). The company reverted to promotions, which could be a successful sales driver this holiday season but its chances of hurting margins cannot be ignored.

J. C. Penney’s endeavors to recover and give itself a major facelift seem to be paying off well, as reflected in the narrower-than-expected loss for third-quarter 2013. The company delivered a loss of $1.81 per share that fared better than the Zacks Consensus Estimate of loss of $1.86 but widened from a loss of 93 cents in the year-ago quarter.

Ullman’s investment will definitely boost investors’ confidence in this Zacks Rank #3 (Hold) stock.  With the challenges bracing J. C. Penney, it remains to be seen whether the undertaken initiatives prove successful in reviving the stock’s growth momentum.

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