BJ Stock Report

2-Year Price History

Ockham's Rating

Rating specific information requires Premium Access.
Buy Now or Take the Tour.

BJ Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, BJ the high and low end of the Price to Sales per share ratios are 0.32x and 0.19x respectively.

Notice that BJ's current Price to Sales per share ratio is 0.18x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $31.48, BJ is 30% below where we would expect to see it. This will beneficially factor into our final analysis of BJ as it is not often that this stock sinks to these levels.

BJ Cash Earnings

As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of BJ, Ockham views their current Cash Earnings as 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 BJ 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 11.80 and a 7.35 low over the same period.

Now that BJ’s current price is $31.48 and its Price to Cash Earnings ratio is 7.00, we are very positive on its outlook from the cash earnings perspective. In fact, BJ is now trading a full 27% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why BJ 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.

BJ Dividends

A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely. Although they may currently pay a dividend, our data source has no historical record of it for BJ. Since we cannot apply our historical trend analysis to dividends for BJ we have a neutral score for the dividend portion of our analysis.