Jamba, Inc. (JMBA)

On October 13, 2009 at 3:50 PM, bridgeboy0 (99.95) wrote:

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).