Is JC Penny's new CEO really a good bet?

Keep reading to find out if Ron's plans for JC Penny's (JCP) will end up in a Michael Jackson or Tito-like collaboration.

Let's take a look at what Mr. Johnson has done so far for Penny's:

Simple Pricing - Penney's will use whole numbers more often when pricing items. In other words, you won't see jeans with a price tag of $19.99, but rather $20.

Everyday Pricing - Permanently marking down all merchandise by at least 40% so shoppers will no longer have to wait for a sale to get the lowest prices in its stores.

Fewer Sales - The retailer will pick items to go on sale each month for a "Monthly Value."

New advertising - JC Penny's has brought on Martha Stewart and Ellen DeGeneres to help give a "fresh face" to JC Penny's.

Mastery Bottom Line:

We're not impressed. Our opinion is all the gimmicks in the world won't help JC Penny's in the short term. There is a big difference between selling genius products envisioned and built by Steve Jobs than selling Dockers and Levi's. And Martha Stewart and Ellen DeGeneres, really?

With a P/E of 54, JCP is extremely overpriced at these levels. Who knows, maybe Ron will turn things around a couple years down the road, but in the short term, JCP is ripe for a short. The April $40 Puts are trading at $1.90 right now - if JCP misses and guides down, shares could easily fall back to the low $30's. Just look at the trend of their earnings.

Q3 2011: -$143M
Q2 2011: $14M
Q1 2011: $64M
Q4 2010: $271M

JCP reports this Friday with a consensus estimate of .67 cents per share.