Stocks in the News: Yes, it Can Get Worse for JC Penney

Posted: Aug 28, 2013 12:01 AM
Stocks in the News: Yes, it Can Get Worse for JC Penney

Stock number one is: 

Tiffany & Co., (SYMBOL: TIF) and the headline says: Tiffany’s Profit Tops Estimates After Price Increases -- Bloomberg

Luxury jewelry retailer Tiffany & Company reported second quarter earnings per share of 83 cents, blowing away Wall Street’s 74 cent estimate.  Profits came from higher operating margins, buoyed by product price increases and lower silver costs.  Sales surged in China, Japan, and Europe, but were flat in America.

Full year earnings growth estimates rose again today to 9% for the year, and 14% next year. The dividend yield is 1.7% and the PE is 23.

The share price is up 18% since we told investors to buy Tiffany stock in March.  Then in May, we told investors to hold their shares because the stock was likely to trade down $10 in the near-term, which it did.  The price is climbing higher now, towards medium-term  resistance at $84.

Our Ransom Note trendline says:  ACCUMULATE  TIFFANY BELOW $80.

TIF Chart

TIF data by YCharts

Stock number two is: 

J.C. Penney Co., Inc., (SYMBOL: JCP) and the headline says: Bill Ackman takes huge loss on J.C. Penney – CNN Money

On Aug. 12, we reported that hedge fund manager Bill Ackman was urging J.C. Penney to replace its Chairman.  After receiving corporate opposition, Ackman resigned from the Board of Directors the next day.  Now we learn that Ackman’s fund, Pershing Square Capital Management, has hired Citigroup to sell its 39 million shares of J.C. Penney.  The fund is expected to lose nearly half a billion dollars on the trade.

Penney’s is projected to have annual net losses for at least another three years, and cash flow problems are severe.

We told investors repeatedly to sell their shares in J.C. Penney this year.

Our Ransom Note trendline says..... SELL J.C. PENNEY.

JCP Chart

JCP data by YCharts

Stock number three is:

Facebook Inc., (SYMBOL:  FB) and the headline says: Facebook Market Value Tops $100 Billion Amid Mobile Push -- Bloomberg

Facebook’s market value passed $100 billion as aggressive growth investors continue to buy shares in the world’s largest social network.  The company surprised investors in late July when reporting a rapid and successful transition from desktop to mobile advertising, delivering hope for a profitable future at Facebook.

Earnings are expected to grow about 33% per year for the next three years.

The stock is finally trading above its May 2012 IPO price of $38.  The share price is up 40% since we said “buy Facebook” on May 2.  Investors should be prepared for volatility by using stop-loss orders.

Our Ransom Note trendline says....  HOLD FACEBOOK.

FB Chart

FB data by YCharts

Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.