Subscription: Value Stocks
BGS - very interesting long term setup
B&G Foods, Inc. manufactures, sells and distributes a portfolio of shelf-stable and frozen foods across the United States, Canada and Puerto Rico.
On a weekly chart we see an impulsive looking rally structured as five wave fractal that topped at 52.84 in July 2016.
Since then the stock has been in a steady decline. The good thing is that the decline follows a textbook (A)-(B)-(C) down corrective pattern which implies another impulsive move higher upon its completion.
As you can see on the weekly chart below, BGS is entering the Green Target box where the whole corrective move may complete.
BGS - weekly chart updated on 6-27-2019
Financial Strength
This is a profitable company with Net Margin equal to 10%. Its management team is efficient in reinvesting profits which is confirm by solid Return on Capital equal to 45%. It has a manageable debt equal to only 1.9 EBITDA. And it has an attractive valuation under 10 x Free Cash Flow. And the cherry on this cake is crazy dividend yield of 9%!
Operating Margin
9
Net
Margin
10
Return on Capital
45
Price-to-Free-Cash-Flow
9.7
Debt-to-Ebitda
1.9
Dividend Yield
9
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