Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Bojangles', Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Bojangles’ has a trailing twelve months PE ratio of 17.05, as you can see in the chart below:
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This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.36. If we focus on the long-term PE trend, Bojangles’ current PE level puts it below its midpoint over the past few years. Moreover, the current level is fairly below the highs for this stock, suggesting that the stock is undervalued compared to its historical levels.
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Further, the stock’s PE also compares favorably with the Zacks classified Retail - Food & Restaurants industry’s trailing twelve months PE ratio, which stands at 27.29. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
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We should also point out that Bojangles’ has a forward PE ratio (price relative to this year’s earnings) of 18.31, so it is fair to expect a slight increase in the company’s share price in the near future.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Bojangles’ has a P/S ratio of 1.23. This is quite lower than the S&P 500 average, which comes in at 3.15 right now.
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If anything, this suggests some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Bojangles’ currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Bojangles’ a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for BOJA is just 1.41, a level that is lower than the industry average of 1.80. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, BOJA is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Bojangles’ might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘D’. This gives BOJA a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen five downward estimate revision in the past sixty days compared to none upward, while the current year estimate has seen two upward and three downward revision in the same time frame.
As a result, the current quarter consensus estimate has tumbled by 8% in the past two months, while the current year estimate has inched higher by 1.1%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Bojangles', Inc. Price and Consensus
This somewhat mixed trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Bojangles’ is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a good industry rank (among the Top 35%) instills investor confidence. In fact, over the past three months, the Zacks categorized Retail - Food & Restaurants industry has clearly outperformed the broader market, as you can see below.
.jpg)
However, it is hard to get too excited about this company overall as it carries a Zacks Rank #3 which indicates while the stock’s growth story is intact over the medium term, analysts have some apprehensions about the stock in the immediate future. Thus, we can say that while investors may expect slight short-term pain, Bojangles’ remains a formidable value proposition, with strong supporting growth prospects.
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Should Value Investors Pick Bojangles', Inc. (BOJA) Stock?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Bojangles', Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Bojangles’ has a trailing twelve months PE ratio of 17.05, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.36. If we focus on the long-term PE trend, Bojangles’ current PE level puts it below its midpoint over the past few years. Moreover, the current level is fairly below the highs for this stock, suggesting that the stock is undervalued compared to its historical levels.
Further, the stock’s PE also compares favorably with the Zacks classified Retail - Food & Restaurants industry’s trailing twelve months PE ratio, which stands at 27.29. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Bojangles’ has a forward PE ratio (price relative to this year’s earnings) of 18.31, so it is fair to expect a slight increase in the company’s share price in the near future.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Bojangles’ has a P/S ratio of 1.23. This is quite lower than the S&P 500 average, which comes in at 3.15 right now.
If anything, this suggests some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Bojangles’ currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Bojangles’ a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for BOJA is just 1.41, a level that is lower than the industry average of 1.80. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, BOJA is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Bojangles’ might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘D’. This gives BOJA a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen five downward estimate revision in the past sixty days compared to none upward, while the current year estimate has seen two upward and three downward revision in the same time frame.
As a result, the current quarter consensus estimate has tumbled by 8% in the past two months, while the current year estimate has inched higher by 1.1%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Bojangles', Inc. Price and Consensus
Bojangles', Inc. Price and Consensus | Bojangles', Inc. Quote
This somewhat mixed trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Bojangles’ is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a good industry rank (among the Top 35%) instills investor confidence. In fact, over the past three months, the Zacks categorized Retail - Food & Restaurants industry has clearly outperformed the broader market, as you can see below.
However, it is hard to get too excited about this company overall as it carries a Zacks Rank #3 which indicates while the stock’s growth story is intact over the medium term, analysts have some apprehensions about the stock in the immediate future. Thus, we can say that while investors may expect slight short-term pain, Bojangles’ remains a formidable value proposition, with strong supporting growth prospects.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>