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Bear of the Day: Bojangles (BOJA)

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There is such a huge opportunity in the market right now. With this tax reform bill comes earnings estimate revisions to the upside. Across the board stocks are receiving a big boost. Think about what another 10% or 20% upside in earnings will do to your favorite stock, favorite industry, favorite sector. With all this good news, investors need to develop a very antsy approach. What I mean by that is, you have to think, “What have you done for me lately?” when looking at your holdings. If they are stale, your opportunity cost is just too great.

Today’s Bear of the Day is one of those stale names that just hasn’t gone anywhere but down. I’m talking about Zacks Rank #5 (Strong Sell) Bojangles (BOJA - Free Report) . For those unfamiliar with the name, Bojangles develops, operates, and franchises limited service restaurants in the United States. Its restaurants offer never-frozen bone-in fried chicken items, made-from-scratch buttermilk biscuits, fixin’s, and iced tea. As of June 25, 2017, the company had 740 system-wide restaurants, including 314 company-operated and 426 franchised restaurants located primarily in the Southeastern United States.

The reason for the rough Zacks Rank is the series of bearish earnings estimate revisions the company has seen recently. Seven analysts have come out and dropped their estimates for the current year while eight have done so for the next year. The downward moves have dropped the current year Zacks Consensus Estimates from 82 cents to 79 cents for the current year. Next year’s number has gone from 86 cents all the way down to 7 cents.

The bearishness doesn’t just rear its ugly head in the estimates. Looking at the stock chart since late Spring it’s just as bad. After trading above $22 in early May, shares have tumbled, getting all the way down to $12. There’s a ton of negative momentum here as the stock is searching for support. The commodity channel index recently gave a “Sell” signal after crossing down below the zero line.

Investors looking for other ideas within the same industry should look at Zacks Rank #1 (Strong Buy) Famous Dave’s or Zacks Rank #2 (Buy) stocks Arcos Dorados (ARCO - Free Report) and Carrols Restaurant Group (TAST - Free Report) .

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Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »

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Carrols Restaurant Group, Inc. (TAST) - free report >>

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