1-Star Stocks Poised to Plunge: BJ's Restaurants?
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, casual dining restaurant operator BJ's Restaurants (NAS: BJRI) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at BJ's and see what CAPS investors are saying about the stock right now.
BJ'sfacts
Headquarters (Founded) | Huntington Beach, Calif. (1991) |
Market Cap | $1.26 billion |
Industry | Restaurants |
Trailing-12-Month Revenue | $582 million |
Management | Chairman/CEO Gerald Deitchle |
Return on Equity (Average, Past 3 Years) | 7.4% |
Cash/Debt | $40.3 million / $0 |
Competitors | Brinker International |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 23% of the 181 members who have rated BJ's in believe the stock will underperform the S&P 500 going forward.
Earlier this week, one of those Fools, All-Star BuffettJunior1, tapped BJ's as an unsatisfying opportunity:
Seriously people! If you had the money to buy the whole business would you? I just don't think that a business with terrible cash flow, almost nonexistent profit margins, and awful return on capital is worth $1.3 billion. The assets on the balance sheet also don't justify this extreme valuation, since the majority of the assets are just restaurants, which would sell for a significant discount if the company were to liquidate its assets.
Overall, this is just a terrible business! The current valuation is extreme to say the least. This stock needs to drop at least 70% to make it even close to reasonable.
What do you think about BJ's, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Buffalo Wild Wings. Motley Fool newsletter services have recommended buying shares of Buffalo Wild Wings. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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