Jamba needs a boost

Rick Aristotle Munarriz's piece on Jamba Juice here.

Hard for me to fathom that JMBA may need a buyer. Every store in Honolulu is packed whenever I'm there. Who would buy a franchise chain that barely makes a profit with costs that can fluctuate from season to season depending on weather? Then again, a new owner would get to drink all the free Jamba he or she wanted. For life.

On heavy volume, JMBA is down 2¢ to 2.36 with roughly an hour left in the session. It plunged to 2.30 at mid-day before rallying back.

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

Spooky Specs

Thinking of specs, a.k.a. penny stocks, I can't help but use trashy analogies. I mean, a 44-cent stock has no business being a big part of any portfolio. That's like asking the Octomom to be your wife and offering to sire her next eight offspring.

With that in mind, a little spec-wreck observation never hurts. Beats wasting money in Las Vegas because although 9 out of 10 pennies will crash and burn (my official guess), that one penny that survives and rises out of the ashes ... you never know.

• JMBA. I like Jamba Juice. Tastes so good. Fricking expensive now, though. It was 3.75 or so for an "original" sized drink two years ago. Now it's almost 5 bucks. Holee shit. But I digress.

Several months ago, I saw JMBA at 2.00 and dug into the data. I couldn't pull the trigger. Now it's nearing 4.00. But it's still cheaper than a Jamba drink. Might last longer, too.

• BBI. Did some reading on Blockbuster. I was at one of their locations in Honolulu during a closing-the-shop sale. I had no idea it had gotten that bad. But at 44¢, BBI isn't dead yet. The CEO refuses to give up and has locked in a deal that will allow Blockbuster to rent fresh flicks — while Netflix has to wait a minimum of 28 days.

There are a multitude of issues at Blockbuster. Can they stream efficiently and shut down those expensive brick-and-mortar expenses? Is it too late? Is there a stigma? I think people want cheap goodies and they want it fast. So BBI could justify being a $2 stock in the near term, if things go perfectly in their favor. Damn, 44 cents! What can you get for 44¢ any more, maaan?!

• FNM. I actually took a chance on Fannie Mae a few months ago. What a damn stupid trade that was. There's hopeless, and there's FNM. Even with Uncle Sam's full protection, this stock can't get anywhere. Goes to show, you gotta have something of value when you come to the table. Not a bunch of stupidass, dumbed-down mortgage policies that cost the Fed beeeeeeeellions of buckos. Never touching FNM again. Really.

• C. Whoever bought Citigroup below a buck is a genius. Case closed. Now, at around 4.20, I still wouldn't feel comfortable holding C shares for the long term. Trading it short term is another thing, but long term? Schizo, roller-coaster action that makes normal humans puke.

There are lots of people who can buy something like C at 80¢ and forget about it for five years. That would be best. I'm not one of them. Not with all of Planet Earth going through financial hell, followed by the equivalent of plastic surgery/makeovers, ingesting massive amounts of steroids and other human growth hormones ... but they do have nice smiles and look good in photos.

More penny painsters later.

I approve of these

Vehicles for short-term trading

• AAPL. The next catalyst, 3G iPad, is near. Anticipation is there, though this is probably baked into the stock price. Nothing, though, would've indicated a month or two ago that the iPad absolutely would have the Apple store filled to the gills like it is — at least when I'm there.

So that's in a week or two. After that, nothing, really, until the new iPhone is launched this summer. So, any breakout above 271 has to be handled carefully. Maybe a move to 280, and then 271 would become a new support level. Maybe.

Would it come with the 3G iPad? Probably. If not, AAPL will likely continue trading in this 256-271 range.

• C. Definitely ranges between 4.30 and 5.05, give or take a few cents. Discard emotion and trade this vehicle like a machine.

• DNDN. Great day for all supporters of Dendreon and prostate cancer patients. But emotion has no stake in these new levels, 51-52. I first bought DNDN at 7, saw it sink to 4 with the FDA's rejection of Provenge in 2007. There must be some folks who had the same experience, but let their shares sit still for the past three years. Hat's off to them. Not touching DNDN here, though it could start moving again with any kind of partnership or takeover talk.

• F. Ford moved nicely today (2.5%) to 13.60. It's stabilized at 13 plus and worth exploring again as a swing trade.

• GS. Closed at 160 today, up from 152 earlier in the week during the public flogging by Congress. With interest rates still basically zero, GS and the banks are printing money, making easy profits. So why am I not in GS or C?

• IMAX. Not happy about this morning's blunder, but I am expecting a run to 23 or 24 as Iron Man 2 premiere day nears (May 7). This is not a long-ter hold for me. It's strictly in and out, maybe even from week to week. Buy Thursday or Friday; sell Monday. Rinse and repeat all of May and June.

• NFLX. Up to 103 today, but smells too much like Blue Nile to me in price action. Too much competition coming soon. A day trade at best.

• PCLN. Have never studied this.

• SBUX. Howard Schultz is king of all coffee. Missed this comeback.

Specs like JMBA and NBG are on the backburner. I'd love to toy with them, but I've got to make some solid profits first.

Allocation comfort zone

I'm almost 100% in equities right now. My game plan was to be out of IMAX and BIDU by the opening bell this morning. Fail.

I'd rather be in 60% cash (and still 40% long AAPL). I'm leaning toward short-term trades in stuff I can rely on, like AAPL. Speaking of which ...

Reliability ranking

Stocks that have both good growth and relative stability.

1. AAPL. New stores to open in Europe and China. Coolest products on Earth.
2. C. Pandit has cleaned house, cut toxic assets and plays the PR game astoundingly well.
3. F. On a roll. Earnings were superb. Mullaly is king.
4. GS. The worst is over. Higher-percentage move more likely in C, however.
5. BIDU. No real competition and serious China penetration is still in the early stage.

There are a ton of good stocks I don't mention. That's fine. I'm interested in narrowing down to a group of vehicles that I can get comfortable with and understand well. I don't need a list of 100 stocks to make a good profit every day. And when I'm interested in going outside the box, there are great traders with great ideas I can glance at.