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No. of Recommendations: 3
If you are looking for a BLUE (chip) PLATE SPECIAL stock, stop in at BOBE's. That's Bob Evan Farms Inc. (BOBE on the Nasdaq) to those of you Fools who aren't from the Midwest, where this growing family restaurant chain is a household word synonymous with great food at a fair price (as evidenced by lines of customers usually waiting for a table).
THE NUMBERS: This defensive stock has had earnings increases and dividend increases for 9 of the last 12 years (and a pay out ratio of only 22%), with a 10.25% projected 5-year growth rate and a miniscule 0.06 long-term debt/equity ratio. BOBE is in "cash flow positive heaven," way ahead of the averages for its industry and sector (and for the S&P500), generating money for growth and expansion and stock repurchase. Outstanding shares have decreased steadily over the past 5 years, indicating that the managers are intent on rewarding shareholders. 248 institutional investor own 61.5% of the shares and the company is liquid with 34.7 million shares outstanding, yet it is still relatively undiscovered, with an average daily dollar volume of only 4.3 million. The stock price is up 65% since the September 11th tragedy (in the midst of a recession) on increasing volume, with a P/E ratio of 16.7 (on 1-23-02). On 1-9-02, BOBE stated that December same store sales increased 7.5% and they expect to "significantly exceed" current Wall Street estimates for the 3rd quarter and for the fiscal year 2002.
THE BOTTOM LINE: I've owned BOBE and eaten there twice/week for years, served by the same faces, amid many loyal, cost-conscious "gray-heads" and families - and I love to pay myself on each visit. Trust your gut!
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