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Steven Kiel
Steven Kiel
Articles (136)  | Author's Website |

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May 16, 2012 | About:

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About the author:

Steven Kiel
Steven Kiel is the president and chief investment officer for Arquitos Capital Management, a Virginia-based investment management firm. He is a graduate of George Mason School of Law and a captain in the Army Reserves. He manages two spoke funds, The Freedom Fund, a value-oriented portfolio, and The Hayek Fund, a portfolio dedicated to free market principles. He can be contacted at [email protected] or through the firm's website at www.arquitos.com.

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Rating: 3.8/5 (17 votes)

Comments

Dr. Paul Price
Dr. Paul Price - 5 years ago    Report SPAM


JCP's new strategy has been a total disaster an d shows no signs of getting better.

It is still no bargain even after the big drop.

They did not eliminate the dividend due to good news.
slkiel
Slkiel - 5 years ago    Report SPAM
I could not disagree more with you. Watch the presentation. The brands are important, as I mentioned, but also look at the streamlined expenses and reduced corporate bureaucracy in systems and personnel. In fact, nearly every sign points to things improving.
L3G3ND
L3G3ND - 5 years ago    Report SPAM
Ron Johnson may be able to turn around JC Penney -- but it is not going to be a quick or easy. The JCP brand has been synonymous with cheap "crap" without being associated with value the way Target and Walmart have been. I haven't bought anything there for over 15 years.

I have walked through JCP and seen some noticeable branding changes -- but if I were not an investor I would not even have looked. Even if he does a wonderful job of changing the brand -- how will he convince a different set of customers to consider them?

Ron Johnson maybe have done a fantastic job with Apple's retail strategy, but there he was selling iPods, Macbooks, iPhones and iPads. Only time will tell if he will be successful at JCP.

Why should we invest in JCP over the other wonderful value opportunities that do not require a challenging turnaround story?
The Science of Hitting
The Science of Hitting - 5 years ago    Report SPAM
So true; everybody's a long term investor until the stock price takes a hit - as is always the case, people judge an investment's merit by the movement of the stock price rather than by the business fundamentals.

Anybody who watches the video linked above will realize that this management team is making long term changes, as has been discussed from day one; I trimmed in the 40's after the valuation got a bit ahead of itself (from my view), but will start adding again in the low/mid 20's like I did after the sell-off in the months following the announcement of Ron Johnson as CEO (that was another interesting period - stock shoots up 20% on his hiring, and then fell by roughly 1/3 over the coming months).

As Ben Graham noted, make the market your servant; instead, most people continue to be a slave to his megalomania. I'm more than happy to buy this business at roughly 10x average earnings (over the past decade).

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