Bob Evans Farms (NASDAQ: BOBE) owns
and operates full-service restaurants, under the Bob Evans and Mimi's Cafe brand names. The Bob Evans chain consists of 571 stores in the Midwest, mid-Atlantic and Southeast regions of the United States. Mimi's Cafe runs 132 restaurants, primarily in California and other western states. The company is also a leading producer of pork sausage and complementary homestyle convenience foods, under the Bob Evans and Owens brand names. Smithfield Foods (NYSE: SFD) is a competitor.
The firm pleased investors last week, when it reported solid Q4 results and issued in-line guidance for its FY09 performance. The CEO attributed success to cost management on the restaurant side and better-than-expected numbers from the food products business. The shares were subsequently upgraded from "neutral" to "buy" at MKM Partners.
The stock
popped on the news and has since been consolidating the gain in a bullish "pennant" pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with one "strong buy", one "buy" and two "holds". The BOBE P/E ratio (17.64), PEG ratio (1.26), Price to Sales ratio (0.59), Price to Book ratio (1.67), Price to Cash Flow ratio (7.27) and EPS Growth rate (23.81%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 97% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $23.93 and $38.75. A stop-loss of $29.40 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in either of the stocks mentioned above.
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Reader Comments (Page 1 of 1)
6-11-2008 @ 9:03AM
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