Thursday, January 6, 2011

Jamba gets berry excited

Skimming through the vast horizon, I'm clearly from another planet. The market has reached the stratosphere, gone from rock bottom to amazing heights in the past half-year or so, and I was nowhere in the vicinity, as were millions of other jaded investors and traders.

No regrets. Maybe a little envy of those who held their shares of AAPL and CMR and F and C and BIDU and ... well, it's no use whining. But one company I was sure had to have taken off to supreme heights was Jamba Juice. Whether I was aware or not whether Bernanke was still "in charge" or Apple shares had reached 1,000, I knew as a customer that Jamba mania continued through the recession, at least in local stores.

Of course, Hawaii is barely a drop in the bucket. I shouldn't be surprised to see that JMBA, which was around 2.20 the last time I checked (last spring) hit an intraday high of 3.83 (April 27) in before completely dropping trou to 1.60 by late summer. In the middle of summer?

Did fruit costs explode? Maybe buying fruit smoothies were just too much of a luxury for most folks. I mean, it's cheaper (though less "pure") at McDonald's, right? I don't care enough to know the reason. I do know margins are negative, returns are negative (-32% return on equity), year-over-year growth sucks (-16%). The one plus is that there's no debt, but total cash is a measely $36 mil.

Harder to believe is that operating cash flow is barely $4 mil. OK, maybe I'm too harsh. Maybe it's a victory that stores are open and they're not bleeding cash. But it seems growth is done, kaput, pau. And institutions are holding on to 31% of the shares; 9.9% of the float is short.

At 2.37 (up more than 4% today before the close), JMBA announced today that sales at company-owned stores are up. The new numbers will be interesting to look at. For longtime shareholders, they deserve a lifetime pass on a wild ride known as the Jamba roller coaster.

Source: Yahoo Finance

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