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Many of us rarely enter fast food restaurants, preferring to conduct our business with them from the comfort of our driver's seats. Do you know which major hamburger chain was the first to develop and expand the concept of drive-thru dining? The company spokesman is a clownish looking fellow. He may not be the one you are imagining, though. This chap lives in a box.
Jack in the Box (NYSE: JBX) operates one of the nation's largest hamburger chains, with more than 2,100 Jack in the Box theme restaurants in 18 states. The company also operates a proprietary chain of convenience stores called Quick Stuff, with 60 locations, each built adjacent to a full-size Jack in the Box restaurant and including a major-brand fuel station. Additionally, the company operates and franchises Qdoba Mexican Grill, a fast-casual dining chain with more than 400 restaurants in 39 states. Burger King (NYSE: BKC), McDonald's (NYSE: MCD) and Yum! Brands (NYSE: YUM) are major competitors.
The firm had good news for investors last week, when it announced Q4 EPS of 43 cents and revenues of $678.4 million. Analysts had been expecting 39 cents and $679 million. In discussing the successful quarter, the CEO cited efforts to reposition the Jack in the Box brand to appeal to a broader base of consumers. Management also guided FY08 EPS to $2.13-2.21 ($1.98 consensus).
The stock popped on the news and then began consolidating the gain in a bullish "flag" pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the shares with one "strong buy", three "buys" and eight "holds". The JBX P/E ratio (13.96), PEG ratio (1.19), Price to Sales ratio (0.58), Price to Book ratio (3.36), Price to Cash Flow ratio (7.38), EPS Growth rate (26.47%), Return on Assets (9.37%), Return on Investment (11.70%) and Return on Equity (23.38%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $26.50 and $39.77. A stop-loss of $26.50 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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Reader Comments (Page 1 of 1)
2-12-2008 @ 12:51PM
Janelle said...
My husband and I were commenting on all the comercials with sex and very personal things on TV now. It seems that all them are not for children to see. A friend had to explain why the man on Viagra was having problems with his errection. And what was that to her 6 year old twin boys. We try to keep our children from seeing the bad movies and her come comercials just as bad. We were really dissapointed when Jack came on in a hot tub with another couple wanting to make a Jack sandwich. That was so plain to see what they meant with she seductive ladies voice and wiggling eyebrows that a first grader would know. Jack is a clown which was used to attract children to the restruant. I can't believe you would drop to this level. Very dissappointed Grandma.