How Will Bob Evans Farms (BOBE) Stock React to New CEO Announcement?
NEW YORK (TheStreet) -- Bob Evans Farms (BOBE) named restaurant veteran Saed Mohseni as its new president and CEO, effective January 1, 2016.
Along with this announcement, the company said that Mohseni will be appointed to the board of directors.
Currently, Mohseni is the CEO of Bravo Brio Restaurant Group (BBRG), a position he will hold through December 28. Previously, he was the CEO of McCormick & Schmick's Seafood Restaurants.
The decision was made after Bob Evans Farms conducted an extensive search to fill a position that's been void for 11 months. The company believes Mohseni is a solid candidate as he has over 30 years of management experience in the restaurant industry.
Last December, Mohseni's predecessor, Steve Davis, resigned after a proxy battle with an activist investor, the Wall Street Journal reports.
Shares of Bob Evans Farms are retreating 1.4% to $38.96 on Wednesday.
New Albany, OH-based Bob Evans Farms owns and operates full-service restaurants under the Bob Evans Restaurants brand name in the U.S.
Separately, TheStreet Ratings team rates BOB EVANS FARMS as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate BOB EVANS FARMS (BOBE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 521.3% when compared to the same quarter one year prior, rising from -$1.02 million to $4.28 million.
- Net operating cash flow has significantly increased by 107.86% to $40.15 million when compared to the same quarter last year. In addition, BOB EVANS FARMS has also vastly surpassed the industry average cash flow growth rate of 2.77%.
- BOB EVANS FARMS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BOB EVANS FARMS reported lower earnings of $0.70 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.94 versus $0.70).
- Currently the debt-to-equity ratio of 1.52 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.29, which clearly demonstrates the inability to cover short-term cash needs.
- BOBE has underperformed the S&P 500 Index, declining 23.05% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: BOBE