Today's Dead Cat Bounce Stock: Bob Evans Farms (BOBE)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Bob Evans Farms as such a stock due to the following factors:
- BOBE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.0 million.
- BOBE has traded 1.2 million shares today.
- BOBE is up 3.2% today.
- BOBE was down 22.3% yesterday.
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More details on BOBE:
Bob Evans Farms, Inc. operates as a full-service restaurant company in the United States. The company conducts its operations through Bob Evans Restaurants and BEF Foods segments. As of April 25, 2014, it owned and operated 561 Bob Evans Restaurants and licensed 2 Bob Evans Express locations. The stock currently has a dividend yield of 2.1%. BOBE has a PE ratio of 71.0. Currently there are 3 analysts that rate Bob Evans Farms a buy, 1 analyst rates it a sell, and none rate it a hold.
The average volume for Bob Evans Farms has been 301,400 shares per day over the past 30 days. Bob Evans Farms has a market cap of $1.4 billion and is part of the services sector and leisure industry. The stock has a beta of 0.22 and a short float of 11.7% with 2.45 days to cover. Shares are down 9.4% year-to-date as of the close of trading on Wednesday.
Analysis:
rates Bob Evans Farms as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Net operating cash flow has increased to $41.23 million or 20.79% when compared to the same quarter last year. In addition, BOB EVANS FARMS has also modestly surpassed the industry average cash flow growth rate of 20.19%.
- BOB EVANS FARMS reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, BOB EVANS FARMS reported lower earnings of $1.18 versus $2.92 in the prior year. This year, the market expects an improvement in earnings ($2.01 versus $1.18).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The change in net income from the same quarter one year ago has exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income has decreased by 4.2% when compared to the same quarter one year ago, dropping from $6.18 million to $5.92 million.
- You can view the full Bob Evans Farms Ratings Report.
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