Editor's Note

Bojangles is a southern favorite with their "Legendary Iced Tea" to go with their food. Shares have been exploding since their earnings on Nov 3rd.



NEW BULLISH Plays

BOJA - Bojangles Inc - Company Profile

Bojangles', Inc. operates and franchises limited service restaurants in the United States. Its restaurants serve chicken items, made-from-scratch buttermilk biscuits, flavorful fixin's, and iced tea. As of September 25, 2016, the company had 699 system-wide restaurants, including 301 company-operated and 398 franchised restaurants primarily located in the Southeastern United States. Bojangles', Inc. was founded in 1977. Company description from FinViz.com.

In early November they reported earnings of 25 cents that beat estimates for 21 cents. Revenue of $133.2 million missed estimates by only $200,000. They guided for the full year to earnings of 92-95 cents and revenue of $530.5-$533.5 million.

Earnings February 2nd.

Shares spiked $1.50 on the earnings and continued to make solid progress until today's minor bout of profit taking. However, after the bell they announced that certain existing shareholders had filed to sell six million shares in an underwritten public offering. Nearly every broker on the street is participating in the offering so there will not be a problem selling the shares. The company will receive none of the proceeds with everything going to the shareholders.

Shares fell to $18.30 in afterhours after closing at $19.70. Typically when a company gets hit on a secondary, it rebounds almost immediately to the original price unless the shares are sold significantly under the market, which is not expected in this case.

I am proposing we try to buy the shares at the open on Tuesday. If there is any additional decline at the open to support at $18 or so, that would be a $2 discount to where they traded on Friday.

Buy BOJA shares, currently $18.30, no stop loss for Tuesday.

No options recommended because of the wide spreads.



NEW BEARISH Plays

No New Bearish Plays