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4 Stocks Under $5 With Upside

Stocks in this article: SMBLJMBACMFOPURE

Jamba is the holding company for its wholly owned subsidiary Jamba Juice Company, owner and franchisor of Jamba Juice Stores. Jamba Juice is a restaurant retailer of food and beverage offerings. Of the 7 analysts covering the stock, 57% recommend a buy while 28% suggest a hold. As per consensus estimates of analysts polled by Bloomberg, the stock has an implied upside of 42.7% and is currently trading at $2.19.

Analysts at Canaccord believe that the company is still in its early stage of transition, which could generate additional rewards for shareholders. Moreover, Canaccord believes that the company's strong brand coupled with a strategic operating model will enable Jamba to transit into an efficient and profitable company.

The company recently reported a marginal growth of 0.2% in company owned comparable net sales during the fourth quarter, compared to the earlier quarter. The first improvement since 2007, this is attributable to the company's 2010 blend plan, marketing initiatives and innovation in menu offerings. Jamba's president and CEO adds that nine license agreements are intact and four Jamba-branded product lines have been commercialized in the retail arena.

Jamba recently launched its first international Jamba Juice location in South Korea's Incheon International Airport, one of the busiest airports in the world, and the primary airport serving the Seoul national capital area. The company believes that this would provide visibility to a large and diverse group of travelers to and from Korea

Heading into 2011, Jamba expects a 2%-4% increase in comparable store sales with an operating profit margin of 18%-20%. The company intends to develop 50-70 locations in traditional, non-traditional, and express formats. After the refranchise of 15 stores in the Denver market, the company has now signed a purchase agreement to refranchise 41 stores in the Chicago/Mid-West market, scheduled for completion during the first quarter of 2011. With this strategy, Jamba hopes to surpass its goal of refranchising 150 stores.

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