JMBA undervalued

Quote from calibremagic:

people will not stop buying them, people will stop buying them less frequently.

and this will affect the bottom line with companies such as starbucks and jamba.
More...

That is correct,

Everything is low now, but it is better to get in something more secure than this. energy stocks like XOM, FWLT, Even GRMN or AIG are more secure than JMBA in conditions like today.

I am a regular costomer of JMBA, But when I pay $15 more when I fill my tank up, I will make it up with not getting that $5 shake.
 
Quote from tradestrong:

I told you why I'd freak'n pick it. Because the price is below book value per share. The company has realized that it needs to cut costs, (which it has the last quarter), and the "real" PE is quite low.

Do you have any fundamental reasons why you think it's a piece of garbage?
More...

I've observed that stocks which go "ex-growth" first fall to "cheap" PEs, and go below book value - next they fall even further. It seems to be a necessary part of the cycle for them to inflict serious pain on value investors who bottom-fish on the way down.

IMO you want to take the current "cheap" price, and then wait for the stock to fall so much that it would double or triple to get back to this price. Almost all the good value investors admit they get in too early. That's because they buy when it's cheap. The best time to buy is not when something is cheap, but when it is so damn undervalued that even the price going back to "cheap" would make you a killing.

The typical value approach is buy at a 50% discount to intrinsic value. IMO a better approach is to buy at a price such that simply moving back to a 50% discount to intrinsic would make you 2 times your money or more.
 
Hi All,

Just seen this thread so apologies if I've come in a little late.

Personally, I could not buy a stock that had fallen from $13 to $3 during the past 2 years. If I was going to buy into this sector, then I would say that PEP looks a far better prospect. Not a bad uptrend during the past 12 months.

Each to their own I suppose......we're all different!


Thanks

Damian
Professional U.S. Share Trader
 
Excellent post Bob and you've elegantly highlighted exactly why fundamentals and economics of the business are more important than price action.

I completely agree with you and am very glad to see somebody else that understands what to look for in good value buys and how to interpret and understand Financial Ratios and other important aspects of a business such as management.

I believe this thread has highlighted exactly why Technical Analysis has a serious flaw in trying to find "values". Notice everybody has highlighted "price action" this and "price action" that. For a value buy, price action doesn't tell you anything about value. This flaw exposes exactly why it is impossible to have any guage of when a stock is undervalued. All TA can tell you for a stock like this is that based on historical statistics, it is overvalued or undervalued. It doesn't tell you anything fundamentally about why the price action has moved or why the price action is exhagerated. Price movement doesn't tell what the debt looks like in a company. It doesn't tell you whether the company has any hard assets or goodwill and what the worth of those assets are.

The flaw exposes this problem for somebody who only watches price action to miss when a stock is undervalued, or understand that a stock really has hit a floor for value.

Don't get me wrong. I do use TA. But I first use fundamentals to understand the price action and then I use TA to execute.

That's OK though. There's enough competition in people finding underpriced stocks. I'd rather people not understand fundamental analysis.

Quote from bobthetrader:

Let me say off of the bat that I own Jamba at $4.50. It got killed after that, but I have no worries about it at all. I've been investing for a long time, and I've seen this before.

Jamba is a fast growing company trading below book value. It's not even a matter of if it's going to jump, but when. And when is likey as soon as the fear selling calms down.

Jamba is not one of those $3 spec stocks of a little known company. Jamba is THE leader in the smoothie industry and one of the big names in the health food industry, which will grow indefinitely.

For the guy who says he's never had one, that's cool. I've never eaten at Jack in the Box, but I know it's a popular place. In California, where I live during most of the year, Jamba is huge. People go to Jamba like they go to starbucks or doughnut shops in most places. If you want a healthy treat, Jamba is the first place on peoples minds. Of course, in So Cal healthy eating has long been a part of the culture. That's starting to make it's way around the country.

Jamba has an elite management team. They've had tremendous growth (slowing it down a bit is not a bad thing). Their sales continue to rise (even if you haven't had one yourself). Even their same store sales rose almost 4% in a slow economy. And, they have a new line of products coming out at the beginning of next year.

I'm not trying to convince anyone. Really. I just see so many negative answers to your question by people who obviously haven't followed the company. Many stocks are falling due to fear. If you judge by that, you may as well get rid of Cisco, JC Penney, Starbucks, etc.

A company like this, selling at this price is a give me in the long term. In the short term, it could fall some more, or it could jump by 40% tomorrow. It's hard to say. I grabbed it when it was just too good not to. It fell. I wish I had waited, but I'm not upset. I've learned that if you buy a solid company at a good price, you'll be happy in the end.

Jamba will hit $8. It could be in three months, or in two years (if next year's economy is really that slow).
More...
 
Show me a stock trading at 50% of its intrinsic value. In a perfect world, you are correct. But in the real world, there is so much competition and the big institutions and hedge funds have automated systems to expose these undervalued stocks the very instant they approach anything like you've mentioned and then they surge 15% in one day. The 50% rule just doesn't work in this day and age of fast technology.

What I look for are companies that are relatively undervalued which aren't being followed by every analyst on the block.

If my goal is over 50% profit, I execute.


Quote from Cutten:

I've observed that stocks which go "ex-growth" first fall to "cheap" PEs, and go below book value - next they fall even further. It seems to be a necessary part of the cycle for them to inflict serious pain on value investors who bottom-fish on the way down.

IMO you want to take the current "cheap" price, and then wait for the stock to fall so much that it would double or triple to get back to this price. Almost all the good value investors admit they get in too early. That's because they buy when it's cheap. The best time to buy is not when something is cheap, but when it is so damn undervalued that even the price going back to "cheap" would make you a killing.

The typical value approach is buy at a 50% discount to intrinsic value. IMO a better approach is to buy at a price such that simply moving back to a 50% discount to intrinsic would make you 2 times your money or more.
More...
 
Quote from piezoe:

1 banana
1 scoop soy protein (unflavored)
1 TBS toasted wheat germ
5 frozen strawberries + 10 frozen blueberries
1/2 cup orange juice
1/2 cup skim milk

blend on high
~ $1

:)
More...

I'm sure that makes a nice drink. The issue is not whether you can make if for cheaper at home. You can make pizza, coffee and any kind of sandwich cheaper at home as well. Does that mean that Pizza Hut, Starbucks and Subway are going to go out of business?

The issue is access to variety and, more importantly, convenience. Most people don't have time, or the inclination to sit at home and make these products. That's why people go out to eat. Of course it would be cheaper to cook or prepare at home. It's called a profit margin. It's business.

In California, where Jamba is most popular, many people make their own smoothies. There is also a lot of competition for smoothies here. That Jamba is so successful in this environment points to the strength of it's product.

If anything, you just made an argument as to why Jamba is the right business in which to invest. That is one heck of a markup, and sales continue to grow. It's why Starbucks is what it is. The same with any soda company.

Now I think I'll go try that drink.
 
Don't know anything about JMBA (except it fell some more today).

Is it a better deal now? Maybe.

But I'd still wait. Wanting to say "I bought it at the bottom" is an ego thing. Some people who bought Enron were waiting to say it too.

And yes, even if it was good, there is such a thing as a bad time to buy a good stock.
 
Quote from WaveStrider:

Don't know anything about JMBA (except it fell some more today).

Is it a better deal now? Maybe.

But I'd still wait. Wanting to say "I bought it at the bottom" is an ego thing. Some people who bought Enron were waiting to say it too.

And yes, even if it was good, there is such a thing as a bad time to buy a good stock.
More...

Anybody who bought Enron didn't know how to read a cash flow statement. It was obvious that Enron had no cash whatsoever, yet they had all these "earnings". A quick look at that fact that no cash was coming in made it blatantly obvious they were playing accounting games.

You can "trick" people with income statements. You CAN'T trick people with cash flow statements.
 
Quote from TheDamo:

Hi All,

Just seen this thread so apologies if I've come in a little late.

Personally, I could not buy a stock that had fallen from $13 to $3 during the past 2 years. If I was going to buy into this sector, then I would say that PEP looks a far better prospect. Not a bad uptrend during the past 12 months.

Each to their own I suppose......we're all different!


Thanks

Damian
Professional U.S. Share Trader
More...

This is the same sector, but not the same industry. In fact, with Pepsi being over a $100 billion company, we are really talking apples and oranges here. We're are talking about an undervalued small cap company with a great upside. You are talking about one of the largest beverage companies in the world.

I'd invest in Pepsi, or Coke as a safe investment in these times. I have some of those too. But, if you are looking for a solid company that has the potential to double, or triple (or more) over the next year, Pepsi is not it. If you are looking for the next Starbucks in it's early stages, that's not Pepsi either.

If you put half of your money in Pepsi and half in Jamba right now, Pepsi will certainly be there for your three years down the road. It will have some growth too. I guarantee it. Jamba is a solid enough company to know that it will be there too. The growth is not as guaranteed as Pepsi, no. The potential growth, however, is tremendous. It's rare to find that with such a solid company and management team. When you find it, you can't let it pass (well I can't). Someone bought Starbucks early on. It wasn't me. This time it will be.

But, like you say, each to their own.
 
You must log in or register to reply here.
Back
Top