Wednesday, November 28, 2007


I touted these as two cheap retail stocks Sunday night:

Look at JCPenney (JCP 41.30) and Sears (SHLD 112.58). Both stocks are within two points of their yearly low, and at these levels, all the bad news is already priced into the stocks. JCP can tack on 10, and SHLD can add 20 points by Christmas.

SHLD hit a high of 118.24,and closed at 116.20 and JCP closed at 43.53. But think about this. Sears reports earnings tomorrow. Estimates are near .36-50 cents, and Eddie keeps things close to the vest, so Wall Street will be kept guessing. But SHLD has been trying to buy Restoration Hardware. Would Eddie be buying them if earnings were going to be in the toilet?

And Sears, which owns K-Mart whose average customer has a slightly lower income level, is the part of Sears that Wall Street has had a beef with. JCPenney has been revamped, but it is grouped at the Sears "category" by Wall Street. That's why they were mentioned together. If Sears earnings are good, it will pop along with JCP.

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