JMBA undervalued

Discussion in 'Stocks' started by tradestrong, Nov 22, 2007.

  1. (yes...sorry, this about investing)

    Somebody tell me why they don't believe JMBA is now very much undervalued?

    The company recently warned that it won't be growing as fast next year as they originally wanted. I say GOOD!!!

    Their earnings weren't as good as they wanted this most recent quarter.

    Overall though, the company is "fairly" financial stable. Even though they are a little in debut, they've reduced their debt a nice amount last quarter and their focus right now is fixing their financials. Their TTM PE excluding extroadinary items is 9.7 times.

    The price fell over 30% with the warning from a little over 4 to about 3.13. Their book value per share is 6.32 (although their tangible book value is lower than I'd like at .81). I own a little bit of this stock at about 4 and plan on adding a nice amount at the current levels of 3ish.

    So tell me why this stock is not a bargain at these levels and the crash of 30% was not strictly an overreaction by wall street because of their slowing growth. I believe that this a value investor's dream. The company is going to throw growth out the window and instead will focus on the financial fundamentals.

    I think this stock has the potential to double over the next 3-4 years as the company sorts itself out and starts to grow again.
  2. All companies have potential.

    JMBA dropped like a hot coal.
    Catch a falling knife if you like. Not me.

    Even if it doubled tomorrow, not my style.
  3. AAA30


    I was not going the reply because I do not know about the company but.

    For a company like Jamba Juice to says "they will not focus on growth and instead on the financials" means when translated that their model is not working and they will have to make significant changes to maintain their survival. Just a red flag for me.
  4. Risk to reward.

    The stock has dropped like a falling knife, but that's because it has been perceived as a growth company when it really shouldn't be at this point.

    Panic set in, and now the stock price has reached a critical mass. The margin of safety is quite large right now. You don't make 100% gains on a stock if you aren't willing to have it go considerably against you, and if it already is in the margin of safety, who cares if it declines more.

    It's a risky investment, but what investment isn't? Relatively speaking though, it carries much less risk I think than most growth stocks out there.
  5. That's a red flag for a growth investor, that's a green flag for a value investor. Apples to can't compare them.

    Which is precisely why the stock dropped 30%. Growth investors don't like news that says "we aren't going to make your future prediction of what the stock is worth based on growth factor into our business decisions".

    In other words, the company is saying that growth tomorrow is not as important as making money today.
  6. Dead cat bounce written all over it. Take it to 3.50-3.75 and bail.
  7. I've seen a few of their franchises/stores, but I've never personally had any Jamba Juice to drink nor has anyone I know... nor have I ever seen anyone drinking that stuff...
  8. Sorry, this is just plain wrong.
  9. its a piece of garbage. why you would pick this stock out of the many thousands out there is a mystery. typical 'pie in the sky" under 10 stock.
  10. No it's not.
    #10     Nov 23, 2007