Check out Bob Evans (BOBE). Sold off its restaurants and bought a potato company. Seems like a good reason to buy, doesn’t it? (May 30, 2017)
BOBE
Imagine my delight when I see Bob Evans ( NASDAQ:BOBE ) here, then up at 75.00, and then it got just crushed right down the 50-day moving average. Well, they went ‘ex’ on a special dividend of $7.50, so you have got to expect this kind of a move down. They also sold their restaurant chain to some other company (I don’t really care who it was) and they bought a potato company. So basically what they have done is, they ditched their restaurant. Fewer and fewer people are going out to eat, and why would you when you get TV dinners and you can watch all that fantastic stuff on cable TV? Fewer people are going out to eat so I think that was good for them to be doing that. Now they are focusing on their prepared foods.
So guess what? This stock fell right back to the 50-day moving average. They pay almost a 2 percent dividend, it’s not huge but it is enough to keep you interested. This is one of those instances where there is kind of a rare buying opportunity close to the 50-day moving average. I really think even now that the stock is up above it, say 5 percent, this was a real key buy. A real ideal time to snag this stock. A lot of times you will get chances to buy stock in companies that pay high dividends. You get a chance to buy them on the day when they go ex-dividend; where you had known the stock yesterday in order to get the dividend. After that the stock will tank and you get an opportunity to buy the stock at a cheap price. So you want to look at that on uptrending stocks.
For now, I would be buying this stock right now, and I would just have a stop just below 65.00. That is actually a little bit tighter stop than I would prefer having, but in this case I will take it. So just check this type of stock out, when it is moving higher, you get a big sell-off, and you know why the stock sold off. You have got to figure a lot of folks won’t know why the stock sold off and they will be selling, which takes it even cheaper. And now we have got a stock that is in a really solid uptrend, you are near a buy point, you know where your exit is.
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