This nut producer is expected to grow at double-digit rates this year (32.40%).
John B. Sanfilippo & Son, Inc. (JBSS)
From Validea Hot List Newsletter
Strategy: Growth/Value Investor
Based on: James P. O’Shaughnessy
John B. Sanfilippo & Son, Inc.(JBSS) is a processor and distributor of peanuts, pecans, cashews, walnuts, almonds and other nuts. The company offers nuts under a range of private brands and under the Fisher, Orchard Valley Harvest, Fisher Nut Exactly and Sunshine Country brand names.
JBSS also markets and distributes a diverse product line of food and snack products, including snack mixes, salad toppings, snacks, snack bites, trail mixes, dried fruit, and chocolate and yogurt coated products under private brands and brand names. The company’s principal products are raw and processed nuts, but its nut product line includes black walnuts, English walnuts, macadamia nuts, pistachios, pine nuts, Brazil nuts and filberts.
JBSS sells its products through various distribution channels to buyers of nuts, including food retailers, commercial ingredient users, contract packaging customers and international customers.
MARKET CAP: PASS: The first requirement of the Cornerstone Growth Strategy is that the company has a market capitalization of at least $150 million. This will screen out the companies that are too illiquid for most investors, but still include a small growth company. JBSS, with a market cap of $594 million, passes this criterion.
EARNINGS PER SHARE PERSISTENCE: PASS: JBSS, whose annual EPS before extraordinary items for the last 5 years (from earliest to the most recent fiscal year) were 1.58, 1.98, 2.36, 2.60 and 2.68, passes this test.
PRICE/SALES RATIO: PASS; The Price/Sales ratio should be below 1.5. This value criterion, coupled with the growth criterion, identify growth stocks that are still cheap to buy. JBSS’s Price/Sales ratio of 0.62, based on trailing 12 month sales, passes this criterion.
RELATIVE STRENGTH: PASS: The final criterion for the Cornerstone Growth Strategy requires that the Relative Strength of the company be among the top 50 of the stocks screened using the previous criterion. This gives you the opportunity to buy the growth stocks you are searching for just as the market is embracing them. JBSS, whose relative strength is 67, is in the top 50 and would pass this last criterion.
John Reese, Validea Hot List Newsletter, www.validea.com, 877-439- 0506, September 9, 2016