4 Consumer Stock Stories for Tuesday Investment Shopping

J.C. Penney & Co. (NYSE:JCP): Closing price $16.42

On Tuesday, Moody’s Investors Service downgraded its long-term ratings of J.C. Penney, including its Corporate Family Rating, from B3 to Caa1. The Speculative Grade Liquidity rating of SGL-3 is unchanged, and the rating outlook also remains negative. This downgrade is subsequent to the retailer’s announcement that it had made a commitment letter with Goldman Sachs, through which the latter has committed to a $1.75 billion senior secured term loan. Moody’s analysts commented that “although the term loan bolsters JCP’s liquidity, it will not solve JCP’s longer term performance concerns nor reduce the level of anticipated cash burn at JCP over the next twelve months. The downgrade acknowledges that the term loan will greatly weaken JCP’s capital structure at a time when its earnings are at precarious levels. The downgrade reflects Moody’s opinion that the position of the existing bondholders has been weakened by the addition of further secured debt ahead of the unsecured notes in the capital structure. It also acknowledges that the additional debt makes it highly unlikely that JCP will be able to bring debt to EBITDA to below 7.0 times and EBITA to interest expense above 1.0 time over the next twelve months, levels more indicative of a low single B rating.”

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JCP

General Motors Company (NYSE:GM): Closing price $30.84

GM says that its spate of new products should help grow its market share over the next few years. In 2012, the  automaker lost share to its crosstown Detroit rival Chrysler Group, and to the Japanese automakers, as their sales rebounded, after losing to the domestics in 2011 because of supply difficulties after the Japanese earthquake and tsunami. Now helping GM are new showroom offerings; some 70 percent of the automaker’s domestic portfolio will be refreshed between the start of 2012 and the end of 2013, with 89 percent refreshed by 2016.

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GM

Wal-Mart Stores (NYSE:WMT): Closing price $77.72

On Tuesday, the company’s United States Chief Executive and Navy Veteran Bill Simon participated in the Joining Forces Employment Announcement with President Obama, Vice President Biden, First Lady Michelle Obama and Dr. Jill Biden at the White House. On the occasion, Simon made the following statement (in part) concerning Wal-Mart’s Veterans Welcome Home Commitment and the White House Joining Forces Initiative: ”So earlier this year, Wal-Mart announced we will offer a job to any honorably discharged veteran within his or her first twelve months off active duty. We project that Wal-Mart will hire and train more than 100,000 veterans over the next five years.”

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WMT

Macy’s (NYSE:M): Closing price $44.60

The historic retailer was unable to persuade an appeals court to impose a preliminary injunction that would have disallowed J.C. Penney from selling a number of products created by Martha Stewart Living Omnimedia which do not bear the Stewart brand name, and are labeled under the brand “JCP Everyday,” upon the condition that J.C. Penney will not associate the goods with the Martha Stewart name in promotions or marketing.

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M

Investing Insights: Is Wal-Mart A Worthwhile Investment?

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