And the Pigs Get Slaughtered. Today's Pigs: J.C. Penney and RadioShack

Updated
And the Pigs Get Slaughtered. Today's Pigs: J.C. Penney and RadioShack

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Wall Street is not a nice place. When they say on the Street that the pigs get slaughtered, it refers to things like bloated and outdated companies that, like their barnyard equivalents, eventually have to be put down. Two companies moving a step closer to the slaughterhouse today, having seemingly run their courses, were J.C. Penney and RadioShack . At this point, it's just a question of how much time and how many resources are wasted trying to save them before the inevitable occurs.

Shares of J.C. Penney plummeted 10.39% today after the company reported a 2% increase to same-store sales during the fourth quarter. That's the company's first comps growth since the second quarter of 2011, but it was far short of the 4.2% analysts wanted to see. There are plenty of investors who think the company doesn't have long to live unless it can rapidly increase sales -- and its performance during the all-important holiday shopping season quarter didn't exactly instill any confidence. If you insist on investing in this company, at least wait until it shows a few quarters of meaningful sales growth -- if that ever happens again.


For RadioShack, it was a case of what a difference a day can make. Shares climbed by as much as 11.6% during Monday trading and closed up 3.33%, apparently enjoying a bump from the company's Super Bowl ad, because there was essentially no other RadioShack news. Today, the retailer dropped 4.84% during the regular trading session and another 2% after-hours, as unnamed sources reported to TheWall Street Journal that the company will close about 500 of its 4,500 locations. RadioShack poked fun at itself in the Super Bowl ad, basically admitting that it's pulling itself out of the '80s and modernizing, but closing stores for any reason just means the company has fewer places where it can sell its wares and make money. Inventory has been a concern in recent years, too, and investors should watch to see if management decides to start unloading merchandise on the cheap.

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The article And the Pigs Get Slaughtered. Today's Pigs: J.C. Penney and RadioShack originally appeared on Fool.com.

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