JC Penney Company (NYSE:JCP) flushed, again, on Monday following Friday's poor earnings report. The stock is down over 26% in the last week as all retailers collapse. On Monday, the stock hit a low of the day at $4.17 and I am here to say it may be a strong buy. In fact, it's possible that Monday's flush from $4.53 to $4.17 has nothing to do with the earnings report but is a result of certain funds not being able to hold stocks that are below $5.
It's important to note that this is not all funds. However, it was enough to create added selling pressure on Monday. What does it mean? It may mean that Monday's selling was just a result of the sub-$5 funds selling and once it has concluded, JCP will snap quickly back. Earnings, while not great, were alright. Not, in my opinion, worth a 26% selloff. I think J C Penney is extremely interesting down in this $4.35 range — if my thesis is correct.
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