This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

J&J Snack Foods: Best in Class

BOSTON (TheStreet) -- J&J Snack Foods (JJSF) was founded in 1971 when Gerald Schreiber purchased the J&J Pretzel Co. for about $73,000 at a bankruptcy auction.

Schreiber rapidly expanded the company, securing a trademark for Superpretzel, now a staple at movie theaters, in 1973. Three years later, he had built a national distribution network for his soft pretzels and began acquiring competitors. The company grew steadily until 1985 when it went public on the Nasdaq. That same year, sales passed the $25 million mark. Fiscal 2010 sales are expected to hit $688 million.

In the food-products industry, J&J Snack is a best-in-class company. Focusing on the concession and frozen beverage markets, it has increased sales 6.5% annually since 2007 and boosted earnings per share by twice that amount. Its stock has fallen 10% in the past 12 months. Nevertheless, analysts are overwhelmingly bullish on its trajectory.

J&J Snack's fiscal third-quarter profit increased 6.2% to $15 million, or 85 cents a share, as revenue grew 5.5% to $190 million. The operating margin hovered at 14%. J&J Snack held $81 million of cash and just $310,000 of debt at the end of the quarter -- ample liquidity. The company has fuel on hand for acquisitions, share buybacks or a dividend boost. It currently pays an 11 cent quarterly distribution, equaling an annual yield of 1.1% with a safe payout ratio of 18%.

Schreiber is still actively involved in J&J Snack, serving as chairman and CEO. More pertinently, he is taking bigger bets on his company's future. Schreiber is J&J Snack's largest shareholder, holding 21% of the float. In the latest quarter, he added 41,450 shares to his position. In fact, four of the five biggest shareholders, including small-cap focused Royce & Associates and Neuberger Berman, recently boosted their stakes.

All six analysts evaluating the stock rank it "buy." A median target of $52.25 suggests a return of 34% in the next 12 months. Such upside is rare in traditionally slow-growth food-products stocks. Singular Research expects the stock to rise 54% to $60. Sidoti & Co. predicts a gain of 41% to $55. KeyBank (KEY) forecasts a rise of 33% to $52. J&J Snack's stock trades at a forward earnings multiple of 14, a book value multiple of 2, a sales multiple of 1.1 and a cash flow multiple of 9.8 -- 8%, 53%, 27% and 20% discounts to food products averages.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,919.59 +80.85 0.48%
S&P 500 1,981.60 +9.86 0.50%
NASDAQ 4,527.5140 +19.2020 0.43%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs