Yep. I plan to hold it for a while. Thanks for your concern. I'm making money in other ways just not on this stock. There's nothing in the fundamentals that suggests this price level; the price level should be double based on typical fundamentals (PEG, PE, cash-flow, and new prospects). Inventory is about 7% higher than last year, but they largely succeeded in selling it during the 4th quarter, $3.6 billion is the inventory figure for Feb. 2008. It is definitely taking a beating due to sales volatility but nothing that appears in its long-term prospects to be damming. The lower guidance resulted in a 7.5% reduction in value.
Unfortunately, I own a few shares and put down $40 into an option contract, but I hold other investments as well and thankfully, they've been doing well. I would change my mind if management suddenly went on a spending spree or tried to take on too much inventory. I'd sell even at $25 per share if that occurred, but currently, it looks like they are handling the economic environment with care and are being responsible. I also feel that being a low-end retailer that tries to have some traditional merchandise is a difficult feat to muster. I think it's in between a Target and a Macy's and since it doesn't specialize, it will have particular difficulty. I think the CEO handles the business model well and I'm satisfied with the company's management.
I'm betting on a good Christmas within the next two years and that's what I want to ride; it is in my opinion a short economic slowdown. I also feel that while the rebate checks will be used to pay off debt, I'm betting on the fact that people will use their credit cards once again and be back in the same debt that they were before. I think this was an inevitable economic blip, since people were allowed to borrow themselves into oblivion, thus I look at the housing declines as an opportunity rather than as a casuality. I wished others would see it from the buyers angle since it is very attractive to buy a piece of property right now and it will get more attractive probably until the end of the year.
I maybe should look into selling some of the position to buy COST or XRT so I can get at least some of the run-up. If I had bought XRT on Thursday, I would have been a very happy camper since I could have sold it and bought it back at lower levels. As of late, XRT and JCP have mainly moved in lock step even though JCP is supposed to have a higher beta value than XRT. I am looking at COP, VNQ, DRW, WPS, SLB, and T amongst others as possible investment opportunities, but I'm going to be less interested in a stock that has risen significantly over the last year unless it has a low PE and PEG and has good fundamentals. While CHK has a low PEG, I would probably prefer something like COP. There's something about a 50% run-up that really feels distasteful even if you could argue that it's currently growing at a good clip since that growth could come to an end.
Aqua