J C Penney Company Inc. (NYSE:JCP) is a dicey proposition for investors and with good reason.

At the beginning of almost any retail stock analysis it has to be said- retail is a scary place right now, especially if we’re talking about apparel. Consumer preferences are changing quickly and the growing popularity of online shopping has shaken brick-and-mortar stores to their core.

So any investors choosing retail stocks should be looking for sturdy companies with cash on hand to weather a bumpy ride and a rock-solid future plans that will help them fend off advances from e-commerce titan Amazon.com Inc. (NASDAQ:AMZN).

JCP has none of those attributes, but that doesn’t mean that some investors aren’t wondering, “Should I buy JCPenney stock?”

The Speculative Play

There are a handful of strong-stomached traders who are looking at JCP stock as a speculative play. Some say JCP has bottomed out and although it is unlikely to return to its glory days, it’s also unlikely to go much lower. As fellow InvestorPlace writer James Brumley put it, “there’s no blood left to give.”

Brumley points to the firm’s improving cash flow and debt paydowns as reason to believe there’s a light at the end of the tunnel, and he’s not wrong. JCP has been using asset sales to boost its cash flow and significantly chip away at its massive debt pile. The company is planning to close 138 locations, which is expected to help generate between $300 and $400 million worth of free cashflow.

It’s Not Sears

The thing JCP has going for it is that the firm’s management is making the best decisions possible to generate sales. There’s no question that JC Penney has to sell off some assets in order to keep its debt under control and its head above water, but unlike Sears Holdings Corp (NASDAQ:SHLD), where management appears to have no future plans for the company aside from avoiding bankruptcy, executives at JCP are actually trying to turn things around through aggressive discounting and strategic asset sales that keep the most profitable stores in the firm’s portfolio.

Speculative investors might be hoping that the firm’s efforts will actually result in a turnaround, or they might be looking for a merger. A merge would probably be JCP investors’ best chance a getting a return on their investment, but that is a very slim possibility.

Amazon has been looking to increase its footprint, but there have been no indications that JCP is one of its targets. There’s also a chance that one of its peers will want to merge with JCP to create a stronger organization, but it’s difficult to find a retailer with enough cash and stability to work through JCP’s issues.

Things Aren’t So Rosy

So, there is a case for JCP stock but it’s not a very solid one. More likely than a turnaround at this point is a further decline. As I mentioned in an earlier article, JCP’s second quarter results were massively padded by store closures that bumped revenue up by $79 million. The remaining stores produced a $35 million decline in revenue. Nowhere in the firm’s earnings call did management admit that the top-line growth the firm was so proud of was largely due to liquidation sales—a one time event that won’t be there to fluff up the numbers in subsequent quarters.

Come November when the firm reports its third quarter results, I think investors will be disheartened. Comps are likely to decline again and without the benefits of store closures to pad overall sales figures, I think we’ll also see the real picture of JCP overall sales, and it’s not a pretty one. Looking further afield, we have the all-important holiday shopping season coming up and if JCPenney doesn’t perform the stock is certain to decline further.

The Bottom Line on JCP Stock

JCPenney is not Sears. The firm has a much better future plan and is not in such a precarious position. However, that’s not saying much. JCPenney news has been suggesting that the firm is not heading straight for bankruptcy like some of its retail peers, but that doesn’t mean that JCP stock will make its way higher.

I believe that JCPenney stores will keep plugging along, but without making any meaningful improvements to the firm’s finances and without rewarding shareholders. The upcoming quarters are likely to be disappointing for JCP investors, so I’d steer clear for now until the firm is able to provide some concrete evidence of a real turnaround.

As of this writing, Laura Hoy was long AMZN.