The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
Want to really freak out a trader this Halloween? Go dressed as former J.C. Penney (JCP) CEO Ron Johnson. Or former board member/big shareholder Bill Ackman. Aaaagggh!
J.C. Penney's stock performance this year is infinitely more terrifying than anything that Stephen King, Edgar Allan Poe or H.P. Lovecraft ever imagined.
The struggling retailer has lost more than 60% of its value in 2013.
You'd be better off getting a bag of rocks in your trick-or-treat bag like Charlie Brown than a J.C. Penney stock certificate.
But is there hope around the corner? Big market losers often rebound a year later. That happened with Best Buy (BBY), another retailer that was once left for dead.
Shares of Best Buy are up nearly 260% this year. That makes it the top performer in the S&P 500, ahead of even the mighty Netflix (NFLX).
(I love that a little kid dressed as Boba Fett is the image for that Best Buy video by the way!)
Hewlett-Packard (HPQ) is on a tear too. HP had been a market loser for several years but shares are up about 70% through the first 10 months of 2013 on hopes that Meg Whitman's turnaround strategy will work.
Still, it's tougher to make the case that J.C. Penney will roar back to life. Like Best Buy and HP, it already tried to inject new life into the company with a CEO from outside the organization. The Ron Johnson experiment failed miserably.
J.C. Penney's current CEO -- Myron "Mike" Ullman -- is actually the old CEO who was kicked out when Johnson left Apple (AAPL) to join J.C. Penney.
Revenues are still stagnant. The company continues to lose money. There are legitimate concerns about access to cash beyond the end of this year if J.C. Penney does not have strong sales on Black Friday and throughout December. One analyst even thinks J.C. Penney could soon become a J.C. Penny stock.
Imperial Capital's Mary Ross-Gilbert cut her target on the retailer's shares to $1 a few weeks ago. The next chapter in this once proud company's history may be 11. JCPNQ as a potential new ticker, anyone?
This is not to say that investors should avoid all market dogs of 2013. I wrote a recent column in Money about two other laggards that have a better chance of rebounding in 2014: Exxon Mobil (XOM) and U.S. Steel (X).
They could bounce back next year if the global economy continues to stabilize ... and there is growing evidence that China will avoid a hard landing, that Japan's rebound is for real and that the worst is finally over in Europe.
Another 2013 trick stock miraculously transformed into a treat today fittingly enough. Expedia (EXPE), which was down nearly 20% through Wednesday, cut into a big chunk of those losses following a better-than-expected earnings report. The online travel agency's stock surged more than 16% today.
So looking for bargains among the ugliest stock performers isn't the worst idea in the world. But it's not looking encouraging for J.C. Penney. There may be a better chance that the Great Pumpkin finally visits Linus Van Pelt's pumpkin patch than there is of JCP shares pulling a Best Buy and roaring back to life.
It's time for my Reader Comment of the Week! The only thing that annoys this diehard New York sports fan more than watching Boston fans celebrate their third World Series victory since 2004 is having to actually give some of those Beantowners credit for being pretty smart and funny.
I joked on Twitter that traders should start singing "We Are the Champions" on the floor of the NYSE to celebrate yet another record high for stocks. But Christian Koulichkov, aka @BostonBroker33, one-upped me with an even better Queen reference.
Well-played! Commence with the Wayne and Garth head-bashing.
I also will begrudgingly admit that I'm happy for you and your Sawx. I do love Big Papi. And anything that diminishes the standing of Bobby Valentine is a huge plus.
But more importantly, congrats to Christian for winning your third Reader Comment of the Week award this year! That goes along with three you won in 2012! Maybe they should have a duck boat parade down Boylston Street and on the Charles River in your honor!
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