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BJS has not been doing well, and is hurting me in SLO and also in my personal portfolio. Under the cirmcumstances, I decided to compare it to its peer group. Taking a list of its peers from an S&P report, I created a portfolio in Morningstar, weighted by market cap, and got a report listing P/E, P/B, P/S and P/CF for each stock and the group as a whole.
BJS is lower than the peer group average on all of the 4 metrics. If it traded at the average, its price would be 37 rather than the current 25.50. Looking at total return ytd, BJS is down 12.7% while its peer group is up 37%.
My interpretation: lack of momentum. There are a lot of momentum players out there, and once a stock loses momentum it is shunned. I am not a momentum player, although I do look at growth as a judgment area when selecting stocks.
What I see is a stock trading at a P/E of 9.8, with TTM and 5 Year growth both at 17% in revenue and higher in EPS. I think this industry is going to grow long term, because it requires more technology to squeeze additional oil from declining or unconventional fields and demand for energy will be increasing indefinitely and exponentially. BJS is a solid player and will participate in this growth.
I will hold and wait.
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