Hudson’s Bay Co. (TSX:HBC) can’t seem to find a bottom, as the stock continues to tank with no sign of relief. The stock is now 60% off its 2015 high, and it looks like things are going to get worse before they start getting better. The company is a Canadian icon and has a terrific valuation right now, but is it safe to own with this negative momentum?

There’s no question that the stock keeps nosediving because of its latest quarter, which was abysmal. The company reported a huge net loss of $125 million in Q3, and there’s no reason to be optimistic going forward considering the huge amount of weakness in the retail sector. The management team knows this, and it’s the reason why they cut next year’s sales estimate by $1 billion.

If Hudson’s Bay Co. is going to rebound, then it needs to invest in technology, which will attract customers in stores, enhance customer satisfaction, and boost sales. As we shift into a digital age, retailers like Hudson’s Bay Co. will need to make these kinds of investments in order to stay competitive. Canadian Tire Corporation Limited is an example of a company that has been successful implementing the use of technology into its stores.

Hudson’s Bay Co. has a digital platform, and it saw increasing sales on this medium, but it’s clear that the company needs to invest more time and effort into this platform to boost sales by a significant amount. The company’s e-commerce platform is accounting for more sales as time goes on, and this is definitely a positive for a company that has had nothing but bad news of late.

Hudson’s Bay Co. has customer-loyalty programs, but they aren’t solving the issue of attracting new shoppers. I believe the company will need to invest in innovative technologies in the same way Canadian Tire has to keep customers amused and interested in coming back into its brick and mortar stores. It will be a huge investment, but it’s one that I believe is necessary if the company is to become great again.

The stock is ridiculously cheap, so is it a buy?

Hudson’s Bay Co. is a falling knife right now, and it could take two years or more to rebound from what was a disastrous crash. I believe the management team has the ability to get traffic back in its stores, and I think the company will eventually rebound many years down the line.

The stock is very cheap right now with a 0.2 price-to-book ratio, but I would be very cautious buying a stock that is falling as fast as Hudson’s Bay Co.

If you’re a long-term investor with a five-year time horizon or more, then your best bet would be to buy the stock in small amounts on the way down. There’s no bell that goes off when the stock hits its bottom, but if you buy incrementally on the way down, you’ll have a better chance of catching a better price close to the bottom.

I believe the company is great, but the headwinds could be around for longer than most contrarian investors think. It could take many years before the company gets back on track, so be cautious and make sure you’re in it for the long run.

Stay smart. Stay cautious. Stay Foolish.

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Fool contributor Joey Frenette has no position in any stocks mentioned.