You can build more than just a bear with this company.

There is an old adage that you should invest in what you know.  You probably know this company better than you think, but have never considered it an investment opportunity.  Neither have I.  

Build-A-Bear is a specialty retailer where you build a stuffed bear.  Whenever I have done any kind of stock screening this one always pops up.  But, I have had a tough time bringing myself to looking at the numbers.  Finally, this morning, I did.  And, start building a bear.  Chances are if you live in a major city and have children, you know this company.  But, like me, you may not have considered the company as an opportunity to create wealth.  Neither did I.

Published over a year ago
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Reviewed by Raphi Shpitalnik

Invest in what you know.  You have probably heard that before.  I have seen this stock pop up in my screener a number of times and I always just passed it up not thinking there was anything there.  As it turns out, there are some very good numbers to this company.  Check out what I found.  

Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Build A income statement, its balance sheet, and the statement of cash flows. Potential Build A investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Build A investors may use each financial statement separately, they are all related. The changes in Build A's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Build A's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
The goal of Build A fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Build A performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Build A shares is the value that is considered the true value of the share. If the intrinsic value of Build is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Build A. Please read more on our fundamental analysis page.

How effective is Build A in utilizing its assets?

Build A Bear Workshop reports assets on its Balance Sheet. It represents the amount of Build resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Build A aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Other Specialty Retail space. To get a better handle on how balance sheet or income statements item affect Build volatility, please check the breakdown of all its fundamentals.

Are Build A Earnings Expected to grow?

The future earnings power of Build A involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Build A factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Build A stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Build expected earnings.

And What about dividends?

A dividend is the distribution of a portion of Build A earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Build A dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Build one year expected dividend income is about USD0.5 per share.
Dividends Paid is likely to drop to about 319 K in 2024. Dividend Paid And Capex Coverage Ratio is likely to drop to -0.62 in 2024.
Last ReportedProjected for 2024
Dividends Paid335.8 K319 K
Dividend Paid And Capex Coverage Ratio(0.59)(0.62)
Dividend Yield 0.07  0.06 
Dividend Payout Ratio 0.42  0.34 
Investing in stocks that pay dividends, such as stock of Build A Bear Workshop, is one of many strategies that are good for long-term investments. Ex-dividend dates are significant because investors in Build A must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Build A. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

Build A Gross Profit

Build A Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Build A previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Build A Gross Profit growth over the last 10 years. Please check Build A's gross profit and other fundamental indicators for more details.

Breaking down Build A Further

There is an old adage that you should invest in what you know.  You probably know this company better than you think, but have never considered it an investment opportunity.  Neither have I.  

Build-A-Bear is a specialty retailer where you build a stuffed bear.  Whenever I have done any kind of stock screening this one always pops up.  But, I have had a tough time bringing myself to looking at the numbers.  Finally, this morning, I did.  And, start building a bear.  Chances are if you live in a major city and have children, you know this company.  But, like me, you may not have considered the company as an opportunity to create wealth.  Neither did I.  

Here are the financial numbers that I wanted to go over for the company, revenue, operating profits and earnings-per-share, respectively, over the past several years:

2011:   $394.40 $21.50 -$0.98

2012: $380.90 $6.70 -$3.02  

2013: $379.10 $16.80 -$0.13 

2014: $392.40 $34.20 $0.82  

2015: $377.70 $34.20 $1.61  

The revenue is nothing outstanding.  It is consistent and barely waivers.  At the same time the company has been able to work through a downturn that saw the entire economy come to a halt.  This type of company is listed as cyclical, and I would venture to say that Build-A-Bear’s cyclicality might be a little more so than others.  After all, when money starts to get tight, and families start to cut back, events like building a bear may be the first to go.  

However, that downturn is past.  It was significant and the company weathered it strongly.  In fact, their liabilities barely changed over the past five years and they report no long term debt during all of that time. Now, perhaps it is time to treat the kids to something fun for a birthday.  Building a bear may be the perfect event to do so.

Mostly, the company deals with franchises so they do not necessarily have risk, per say.  The franchises deal with the monthly rent, bringing in business, employee issues and other aspects of running a small retail store.  The company deals with providing the base product and some advertising.  That is one of the beauties of a company such as this, the parent company is removed from a lot of the day-to-day dealings with a retail business.  Then, the company brings in revenue via fees and costs associated with other companies doing business.  In a lot of ways this company owns nothing more than a label and then outsources all other aspects of the company.  

That kind of business model has always been an interest to me.  McDonalds and Coca-Cola do the same thing as well as so many other companies out there.  I have always been interested in investing in companies like this because of their removal from the actual day-to-day business.  And, they are relatively cost free as all they do is outsource the manufacturing of the base product.  

The product itself is interesting to me because the company can come up with ideas for a bear.  But, the consumer ultimately decides on what the bear will look like.  This makes the company consumer driven.  Then, the social aspects kick in driving more business to the company.  Everybody wants to get on the internet and show the world what they just created.  

Like I said in the beginning of this analysis, I have passed up this company as a potential for investment so many times.  But, that might be a mistake.  There is real value here.  And, that value can translate into real, long term profits and wealth.  You should definitely consider this company as a potential long term investment in your portfolio.  This is something that you can build upon. 

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and David Taylor do not own shares of Build A Bear Workshop. Please refer to our Terms of Use for any information regarding our disclosure principles.

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