With the market pursuing its usual roller-coaster course, volatility has started to spike recently. While the VIX index, which measures option volatility, ended lower on Friday, it is still way below highs earlier this year and the big spike last fall. Investors looking for growth ideas may want to look away from momentum, and Jefferies has three very solid ideas for this week.
The Jefferies team initiates two new stocks with a Buy rating and a third will report earnings after the closing bell Monday. Those less adventurous may want to see just how those numbers come in, while others may want to buy stock in front of the announcement.
This company had a recent well-received initial public offering (IPO), and the Jefferies team initiates the stock with a rating of Buy. Bojangles’ Inc. (NASDAQ: BOJA) is a self-described, highly differentiated and growing restaurant operator and franchisor dedicated to serving customers high-quality, craveable food made from Southern recipes. Founded in 1977 in Charlotte, N.C., Bojangles’ serves menu items such as delicious, famous chicken, made-from-scratch buttermilk biscuits, flavorful fixin’s and Legendary Iced Tea. As of March 29, 2015, Bojangles’ had 258 company-operated and 377 franchised restaurants, primarily located in the southeastern United States.
According to the Jefferies report, “Bojangles’ has a strong people and service culture that should help the brand perform going forward.” The company has seen average unit growth of $1.8 million with more than 20% restaurant level margins. In recent years, Bojangles’ has witnessed unit growth of 7% to 8%, and the Jefferies team expects this growth to continue.
The Jefferies price target for the stock is an aggressive $32. The Thomson/First Call consensus figure was not yet available. The shares closed Friday at $24.51. The company will report earnings on Thursday June 11 after the close.