The Razor's Edge

2-Year Price History

Ockham's Rating

Rating Specific Information Withheld Premium Access Only

BJS Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at BJS through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 2.78x and 1.56x respectively.

Utilizing this range we can see that BJS’s current Price to Sales per share ratio of 0.64x is significantly below its average levels historically. In fact, with a current price of $12.43, BJS is a full 71% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for BJS.

BJS Cash Earnings

As the old saying goes, "Cash is King!" However, we prefer to capture a few other items within our analysis to identify "cash earnings". Nevertheless, an analysis of Cash Earnings is absolutely pivotal to assessing a company's value, and currently BJS is significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for BJS to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 15.62 and a 8.66 low over the same period.

Now that BJS’s current price is $12.43 and its Price to Cash Earnings ratio is 3.72, we are very positive on its outlook from the cash earnings perspective. In fact, BJS is now trading a full 70% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why BJS has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.

BJS Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure on a company's inherent expectations.

Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from BJS against the historic high and low levels over an available data range. Because BJS has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In BJS’s case, the estimated annual dividend is $0.20 producing a current dividend yield of 1.61%. The highest dividend yield from BJS in recent history was 2.40% while the lowest dividend yield was 0.00%. It's hard not to notice that BJS pays a current dividend yield that is 34.17% above the historical median. This peaks our interest since our analysis is looks favorably upon dividend yields that are greater than the historical median.