HOW TO KNOW IF YOUR INVESTMENTS ARE WELL MANAGED
Today’s chart highlights a business that’s focusing on its profits…
Bob Evans Farms (BOBE) is a $1.3 billion company that operates more than 500 family restaurants. It’s also a leading producer and distributor of sausage and bacon, as well as refrigerated and frozen foods.
In January, it sold its restaurant business to focus on its packaged-foods division.
It also purchased Pineland Farms Potato Company, which will give it more access to raw materials at lower costs.
These decisions are all about profitability.
Bob Evans’ restaurant business earns around 3%-4% operating profits on its sales.
But its packaged-food business earns nearly 17%.
Management is wisely choosing to ditch the low-margin restaurant business and focus on what works.
Investors applauded the deal… As you can see in the chart below, BOBE shares are up nearly 40% since the sale was announced, and they just hit a new all-time high. Focusing on profits is often a sign that management is making the right moves. And in this case, it has pushed this stock to never-before-seen levels…
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Source: Daily Wealth’s Market Notes