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, Mark Hake Of Capital Management said that J C Penney Company Inc
JCP is a great turn around story. He thinks that buying J C Penney is the best way to make money in the retail sector right now. If it continues to pull sales in, like it seems to be doing from Macy's and other places, the stock is going to have a huge potential.
Mark Hake said that this is an operating leverage story and just a slight increase in sales would massively increase both margins and cash flow. The typical retail stock is trading for 12 times free cash flow and Mr. Hake estimates that J C Penney's free cash flows at $200 to $300 million, within a year or so. That is at least $11.80 stock or maybe even much higher, thinks Mr. Hake. He added that in the most bullish scenario, the stock should be worth $18.
J C Penney Company gained 4.17% in the regular trading and it added additional 3.59% in the after hours, trading at $10.10.
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