The Daily Dose: Crazy Penney Day

 | Nov 20, 2013 | 10:00 AM EST
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Today I assume my alter ego of a Tasmanian Devil, chewing up and spitting out massive pieces of stock coverage with reckless abandon. Hang with me here. Time is brief for me today given a range of commitments.

First, there will be another company exposure live on the Fox Business Network at 10 p.m. My team and I continue to tag the offices of the bad guys with analysis, not spray cans. And no, I cannot share a preview, so please don't inquire (love y'all).  But, please so tune into how I analytically rip apart the innards of a foundering company that you well know.

Second, today is J.C. Penney (JCP) loss-per-share day. If you have been following my not-so-cryptic Twitter messages and comments on Columnist Convo, you should be prepared.

Here are the three things that MUST happen to justify the 23% one-month move in J.C. Penney shares and render the stock an odd name to chase (odd because the fundamentals are scarily weak).

  1. November-to-date sales have to continue the improvement that apparently began during back-to-school season amid give-the-store-away promotions.
  2. There is some sense that September 2013 represented a gross margin bottom.
  3. Year-end liquidity guidance "in excess of $2 billion" must be reaffirmed.

Those are the basics, notwithstanding positive or negative corporate jargon curveballs hurled in our direction by CEO Mike Ullman on the 8-K. Please be aware that for J.C. Penney shares to represent the turnaround buy that recent hedge fund disclosures suggested, ALL of the above three talking points have to occur today.

Outside of the weird land of J.C. Penney analysis, I have a call scheduled with the team at Best Buy (BBY). The stock was slaughtered like a fat pig, I think, as management tried to squeeze out the non-long-term believers prior to the holidays.  Although Best Buy is my top client call of 2013, I was dismayed by one key chart I developed.

What, you didn't believe I could produce colorful charts to socially share? Geeky, but important chart, though. It tells a story of increasing price investment starting to creep negatively into a business that is beyond a large chunk of expense outmaneuvers. Other than that eye-popper of a trend line and comments regarding holiday price competitiveness, I think Best Buy's quarter in total delivered, as did the earnings call, where further online initiatives and vendor partnerships were hinted for 2014 (ahem Google). I continue to have a Buy rating on the stock, for now.

Capping this insane day off will be an evening call with the team at Starbucks (SBUX). I have the investment thesis on Starbucks burned to my brain and that is starting to bother me. Have I become too complacent on this high flyer? Is the market too complacent on this high flyer? Regardless, I am curious on the next pockets of growth from inside the store and even grocery aisles. Pictured below is an exclusive snap I took of a new Starbucks "Signature Aisle." More on that here.

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