The CEO of ailing department store chain J.C. Penney Company Inc. (NYSE:JCP) apparently likes coffee shop giant Starbucks Corporation’s (Nasdaq:SBUX) shares.
J.C. Penney CEO Myron “Mike” Ullman bought 7,000 shares of Starbucks late last week, according to a recent Starbucks regulatory filing that was uploaded to its website on Tuesday evening.
That could represent an investment of about $535,000, at the average per-share price of $76.43 cited in the filing. Following the purchase, Ullman, an unpaid Starbucks board director since 2003, owned 17,000 Starbucks shares. That’s on top of about $254,000 in option awards Ullman enjoyed in 2012, according to Starbucks’ latest proxy statement.
It’s unclear if Ullman’s 17,000 Starbucks securities include securities besides common stock. J.C. Penney declined to comment to IBTimes on Ullman’s Starbucks holdings.
"We do not comment on the personal, non-Company stock activity of our executives," a company spokesman wrote in an email.
Ullman could own up to 306,500 common Starbucks shares, according to the proxy statement, though more than 290,000 of that total may involve stock options.
The move is probably a smart investment on Ullman’s part. Starbucks stock has soared 42 percent for the year to date, propelled by consistently strong earnings and 15 straight quarters of sales growth above 5 percent, despite a weak global economy.
Compare that to J.C. Penney’s recent performance. The company, which suffered through an unsuccessful makeover from former CEO Ron Johnson, reported a loss of $489 million in its latest quarter, with sales down 5 percent, the Wall Street Journal reported. J.C. Penney got booted out of the benchmark S&P 500 index earlier in November, though post-Thanksgiving it reported an unexpected 10 percent boost in sales for November.
Shares are down 58 percent for the year to date.
At market value, Ullman’s apparent 17,000 Starbucks shares could be worth about $1.3 million. In late November, Ullman bought more J.C. Penney stock, according to a filing.