Apple Inc. (AAPL), The Procter & Gamble Company (PG), J.C. Penney Company, Inc. (JCP) – Back to the Future: CEO Style

Investors betting on a big turnaround at J.C. Penney Company, Inc. (NYSE:JCP) should watch sales carefully. There’s likely to be a period of improvement as old customers come back followed by a return to slow decline. When that slow decline starts, shareholders are likely to jump ship. Most, however, should probably just avoid Penney for now.

An Emerging Market Misstep

The Procter & Gamble Company (NYSE:PG) has just brought back its former CEO, A.G. Lafley, after the ouster of Bob McDonald, his successor. After the company’s growth hit a wall when it tried to expand aggressively into emerging markets, tensions rose dramatically at the company. McDonald tried to quickly revamp the company’s growth plans, but it wasn’t enough to ease the internal conflict.

Having activist investor Bill Ackman on the scene during the retooling likely only increased the tension. The end result was the recent departure of McDonald and the return of Lafley. While too soon to see material changes, Lafley received high marks and achieved great success during his tenure. The Procter & Gamble Company (NYSE:PG) jumped on the news and is far from cheap.

Even under McDonald, the company remained a dominant and innovative industry player. So the recent change isn’t as large as the night-and-day change made at Penney. Long-term growth investors should still consider this nearly 3% yielder as it works through this rough patch.

The Big Picture

For Penney and The Procter & Gamble Company (NYSE:PG), the longer term picture is going to quickly return to succession. Both of the CEOs are in their mid-60s, so they won’t be around for all that long. While they may be able to keep the ships going, and perhaps get their respective companies back on track, they aren’t going to stick around forever.

That means recovery today and transition again in a few years. That switch will likely be a harder path at Penney than at P&G.

The article Back to the Future: CEO Style originally appeared on Fool.com and is written by Reuben Brewer.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Apple and Procter & Gamble. The Motley Fool owns shares of Apple. Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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