“J.C. Penney has a lot of levers they can pull to get the customers back,” Bill Miller gleefully told a Schwab conference in November as he bought JCP bonds. Spreads on those bonds have risen over 200bps since then. However, it was the embattled Legg Mason guru’s appearance on CNBC in mid-December that sparked re-exuberance as everyone jumped on his “undervalued” bandwagon and lifted the stock into year-end. Today, back under $6, JCPenney is once again at fresh 33 year lows. Those that followed Miller are down over 25% on their ‘investment’.
The famed stock-picker is also looking at J.C. Penney, which he thinks might be undervalued. After all, he said, there’s “no reason” the retailer can’t get its gross margins back to about 38 percent.
Yeah – that’s not working out so great for the value-investor… knife-catcher
and today’s tumble back under $6 for the first time in 33 years…