Why J.C. Penney Company, Inc. (JCP) Could Be Positioned for a Slump

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Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

J.C. Penney Company, Inc. (NYSE:JCP)

One such stock that you may want to consider dropping is J.C. Penney Company, Inc. (JCP), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in J.C. Penney Company, Inc. (NYSE:JCP).

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 4 estimates moving down in the past 30 days, compared with just 1 upward revision. This trend has caused the consensus estimate to trend lower, going from a loss of $5.90 per share a month ago to a current loss of $6.04 per share.

Also, for the current quarter, J.C. Penney Company, Inc. (NYSE:JCP) has seen 5 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to a negative of 79 cents a share from a negative of 76 cents over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 17.54% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Retail-Wholesale sector, you may instead consider some better-ranked stocks including Christopher & Banks Corporation (CBK), Famous Dave’s of America Inc. (DAVE) and Fiesta Restaurant Group, Inc. (FRGI). All these stocks hold a Zacks Rank #1 (Strong buy) and may be better selections at this time.

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CHRISTOPHER&BNK (CBK): Free Stock Analysis Report

FAMOUS DAVES (DAVE): Free Stock Analysis Report

FIESTA RESTRNT (FRGI): Free Stock Analysis Report

PENNEY (JC) INC (JCP): Free Stock Analysis Report

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