As a value investor, you are likely to come across many struggling companies when doing research. These tend to be the ones trading at low Price/Earnings ratios due to pessimism about the future, so will frequently appear in stock screens. Some will inevitably have the attention of an activist investor who believes they can turn the business around, and in the process produce outsized returns for shareholders. It is easy, as an individual, to believe their assertions and they will often have a good track record to back them up too. But it doesn’t always go to plan as was the case with JCPenney (JCP), and it is an interesting case study to review so that hopefully investors don’t get caught out in this same trap in future.