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bridgeboy0 (99.97)

My new pick for All-Star Portfolio

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October 13, 2009 – Comments (8) | RELATED TICKERS: JMBA

As I mentioned in my previous pick (or non-pick), I was waiting for JMBA to be pick-able in CAPS for me to make it as my selection in the All-Star Portfolio.  Jamba's stock price has appreciated nicely and it is now over 100M for a market cap, so I'd like to make it my selection in ASP.

Why do I not like Jamba?  Have you heard about their past?  Have you seen what they did to all the money they got when they went public?  How about their ill-timed expansion plans (expanding with company-owned stores into the worst recession in decades??).

Why do I like Jamba?  Have you tried their smoothies?  How about their wraps?  Wish you could?  Heard about their licensing agreements?  The new CEO was behind the 'O organics' brand in Safeway.  They've had a SVP of international franchises collecting a paycheck for over a year now and sooner or later there seems like there has to be international franchises for him to oversee.  The movement into food in the stores and bringing the smoothies to schools and other locales to increase sales is a great idea!

Jamba made PLENTY of mistakes and cost shareholders PLENTY of money.  But they really are moving in a positive direction (imho).  They have been cutting costs for a year now and it is starting to have some real effect.  They recently cleaned up their debt by selling preferred stock (the terms of the old loan were horrible).  The new management either are in the right place at the right time (ie lucky) or they are making changes that are really good for the company.

I like the addition of food to the stores (they still need more warm fare for the colder months, but what has been coming out of their test kitchens has been really tasty so I'm not that worried on that account).  Selling franchises to generate capital to get through the recession was a good idea. 

But, really this is JAMBA JUICE!!!  Granted in the beverage industry they are not even a blip.  But in the Smoothie business they are the best of breed and can't be ignored.  Jamba Juice still is not everywhere in the US but with their brand showing up in all kinds of pop culture references they are getting to be really well known.  The current management is looking to make money off of this trend by selling the brand and not just the smoothies.  The vision of Jamba as a lifestyle brand is what I think makes this such a good opportunity.

As far as macro-economics, the locations of the Jamba stores (CA, FL, etc) pretty much could not have been worse for this recession.  But, CA was the 1st state to start into the recession and I think they will be the first ones out of the recession.  If that proves to be true then Jamba will benefit.

So if you've never invested in JMBA count yourself lucky and be grateful for the opportunity to get into the stock at its currently depressed level.  Then sit back and wait out the next 5 years and watch as Jamba becomes ubiquitous and people really do equate Jamba to healthy, quick refreshment (though if they get bought out within 5 years then you will no longer be a shareholder of JMBA).

BravoBevo responded:

bridgeboy0: Best wishes to you!  We have Jamba Juice outlets here in Houston (in downtown food courts and in suburban shopping malls), I enjoy their drinks.  I like the mango flavor the best.  Here their competition are Smoothie King eateries, Seven Eleven outlets, health food bars and gasoline stations' smoothie machines.  Jamba has nice sit-down facilities, unlike the other places I've mentioned.  I hope that they do well.  The only problem I see is that there are no real barriers to entry.  Anyone with a daiquiri slushee machine can make one.

This was my response:

I agree with you about the lack of barriers to entry.  But, I think the quality of Jamba's smoothies are much better than Smoothie King's.

Also, the brand name is worth something (anyone with a frying pan can open a burger joint but that doesn't make them a true competitor to Mickey D's).  I don't think a mom and pop shop want to take on Jamba with a location right next to a Jamba Juice.

I hope you get a chance to try out their new foods...  YUM!  I won't be going near the Greens and Grain Wrap, but to each their own.  But Asian Chicken Wrap and Smokehouse Chicken Flatbread are delicious!  Previously, I couldn't stand Oatmeal but Jamba's version is quite tasty with the toppings on it.  The Apple/Cinnamon makes it taste almost like apple pie in the morning.  Soooooo GOOD!

8 Comments – Post Your Own

#1) On October 13, 2009 at 6:15 PM, clanza875 (99.34) wrote:

I second this motion....

 As far as barriers to entry check with Starbucks and Dunkin Donuts and see how there smoothies have been doing!

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#2) On October 13, 2009 at 7:00 PM, pursueliving (< 20) wrote:

I like JMBA because of its health benefits, most particularly to the aging population.  It's not just the smoothies, although that's where we focus now.  As America's demographics shift toward the over 65+ age group, we need good nutrition in our nusing homes as well as our schools.  The digestive system doesn't operate as well when we age, and its difficult to chew/swallow.  A healthy drink, from fresh food seems like a dream come true. That is why traditionally, mashed potatoes and Ensure made a good meal served w/some soft carrots.  We want our parents to stay as healthy as possible for as long as possible, and juicing unlocks the vitamins and minerals and enzymes essential for good health.  With Jamba's aggressive campaign, they'll be adding nursing homes and hospitals to their list.  We oldsters need good drink too!! 

While I've learned the hard way, you know, buy high, sell low?  I'd like to think that this is one company that can help my portfolio see green - or at least start.

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#3) On October 13, 2009 at 10:09 PM, SolarisKing (27.57) wrote:

Got ya.

 

Want me to hit it tomorrow?

 

-solaris

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#4) On October 14, 2009 at 10:27 AM, edubull04 (< 20) wrote:

  Howzit Bridgeboy! Another SD investor stoked on JMBA here.  They sure are a different company now than when they came out of the ipo, with Paul Clayton at the helm. I like what James White is doing. JMBA has the Nestle deal for Ready to Drink Smoothies coming up soon, the re-launch. JMBA= powerful brand, with liscencing possibilities galore.

  They have been showing up at my son's school selling small size smoothies at lunch, for $3, and he says they sell out quick. I wonder how many schools they do this with every day.

  Due to the past recession, I think SSS will be good going forward. The first quarter with positive earnings is just around the corner imo.

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#5) On October 14, 2009 at 11:43 AM, bridgeboy0 (99.97) wrote:

Solaris,

Yes adding it at any point would be good.  Nice pull back going on so this could be a really nice entry point.

Edubull,

Ya, they just started doing the GoGo's near the end of the last school year and I think using them for a full school year will help out their numbers during the 4th & 1st quarters.  I really hope the re-launch of the RTD is better than what they put out there last time.  In this case, I trust White to protect the Jamba brand and not allow just anything to have the Jamba name put on it.

Bridgeboy

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#6) On October 14, 2009 at 3:04 PM, rockumsockum (< 20) wrote:

jamba juice smoothies are mostly made with sherbert! When you compare them to Tropical Smoothie cafe! There is no comparison!   Don't  see a great future for Jamba! Mostly just breaking wind as jamba is defined in swahaii.

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#7) On October 14, 2009 at 4:28 PM, bridgeboy0 (99.97) wrote:

jamba juice smoothies are mostly made with sherbert!

Wow.  Your insights are imaginative, I'll give you that.  Have you ever had a Jamba smoothie?  Look at their ingredient lists on their website.  A few of their smoothies do have sherbert in them but most certainly don't. 

If this is an issue to you (or perhaps someone reading this who actually has a brain) then you can always get one of Jamba's All-Fruit smoothies instead.  One of the things that I like about Jamba is the variety available (some customers are only interested in completely healthy smoothies and some like more indulgent smoothies and Jamba has options for each).

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#8) On October 15, 2009 at 5:32 AM, mbhoch (< 20) wrote:

This was some great info and background on the company. Seems like there is a lot of room for growth, and a CEO with some very innovative ideas. If you take into account that the US is just starting to take to the healthy lifestyle (compared to Europe and a lot of other places) there is some great potential to be a pioneer in this market. There seems to be a lot more awareness in the US of living healthier these days. Hopefully places like these will replace McD's some day. This post came at great timing too, as far as the stock price. I'm definitely going to give this one a hard look, thanks!

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