Sometimes a confluence of events serves to provide investors with a bountiful windfall or a demoralizing defeat. Often times the same series of events will produce both effects dependent only on which side of the trade one is on. That may be what has happened in the case of Jamba Juice (JMBA).

In the past six months Jamba’s stock has swooned from $8 a share in September to close yesterday at $2.76. Several factors contributed to the freefall. Last month the company reported fourth quarter and fiscal year 2007 results to the disappointment of the street. Analysts called for revenue to measure $64 million for the quarter and $327 million for the year. Jamba reported $54.5 and $317.1, respectively. The stock lost 15% in the session following the announcement.

Jamba Juice has continued to languish, shedding another 10% over the last several weeks. A downgrade, by a Wedbush Morgan analyst, and the general fears of recession which have hung over the market in early 2008 bear some of the blame. But, looking over the numbers, I’ve come to wonder if the street hasn’t overreacted somewhat.

At these levels Jamba Juice trades at just a .5 price to sales ratio using numbers from the prior twelve months. That’s downright cheap, especially for an outfit sitting on $44.5 million and carrying zero debt. And though revenues did not meet expectations, the company still delivered an 18% increase over 2006 sales.

While the current economic environment does not favor the company, the worst is already factored into the current price. In the event of a sustained recession, Jamba Juice would likely suffer. However, with $0.85 a share in the coffers, how much lower could the sale price recede?

Certainly economic conditions will improve in time. For investors with a considerable time horizon, Jamba Juice may prove an intriguing value.

Disclosure: I do not own shares in any of the companies mentioned.

Insider ownership is represented by the percentage of outstanding shares in a public company owned by the directors, managers, officers, or others who have key ‘insider’ knowledge of the operations of said company.

In a general sense I’m looking for corporations whose insiders own at least 10% of the operation. This indicates that the interests of those in charge of the outfit will be compatible with those of the shareholders. Namely, both hold a significant financial interest in the performance of the stock.

It’s not suprising that many of the wealthiest men in America, including the top dog Bill Gates, have achieved their enormous riches by partaking directly in the exponential growth of the world-changing enterprises they oversee.

If one owns 857,499,336 shares of Microsoft (MSFT), then one is Bill Gates and he should be too busy to read this blog.

But, joking aside, it’s clearly evident how Mr. Gates, and others in his position, benefit by appealing to investors (especially of the institutional variety) and taking actions that best serve the stock price over the long run.

Therefore I consider it a net positive for a company’s insiders to hold a significant stake in the outfit. And when insiders purchase company stock on the open market, it’s an even more bullish sign. For insiders may sell for any one of a million reasons, maybe their child is off to college or perhaps they’re buying a new home. But insiders only buy for one reason: They think the stock, and very often with good reason, is going to go higher.

While not an ironclad rule, the stocks you’ll see profiled on story-stocks generally possess a high percentage of ownership by insiders. It isn’t a requirement per se, but it’s absolutely a good rule of thumb.

Stocks and dividends are not a particularly difficult subject to master. A stock is share of ownership in a corporation and a dividend is a monthly, quarterly or yearly payout to owners of that corporation. Let’s look at real world example.

Let’s say you own 100 shares of XYZ corporation which trades at $100 a share. The XYZ corporation has a declared dividend of $1.00 a quarter (or four dollars a year). Your dividend yield for this particular position would be .04% per year. So the company would pay 4% of your investment back to you each year.

So, to continue the example, let’s say that you owned 1,000 shares of XYZ. The purchase of which would cost you $100,000. After twelve months you will have received 4 dividend payments of $1,000. At the end of this period you’d have 4,000 or .04% of your initial investment.

Seeing as you can bank .04% in a risk free bank account you may be unimpressed by this return. However, one can profit twice when playing the stocks and dividends game. You will receive 4% annually in the form of dividend checks while also participating in any gains in the underlying security.

So, though this may be hard to fathom after the year we have had, let’s say that your shares of XYZ appreciate from $100 to $110 in a given year. In this circumstance you will gain both the $10 per share price appreciation (assuming you locked in this gain by selling) as well as the $4 per share dividend check. This would result in your total investment after one being worth approximately $114,000 resulting in a gain of 14%.

Naturally, 14% in a single year amounts to a phenomenal investment. And in these times investors in stocks should pay extra heed to the dividend. For instance, let’s look at a current example. General Electric currently yields $1.24 annually on a share price of 13.06. This amounts to an annual yield of 10.3%. Very appealing, no?

However, in this economic market it would not be shocking to see a corporation like GE cut its dividend. Regardless, it is possible (or even likely) that GE will maintain it’s dividend. Therefore, one can profit approximately 10% annually by buying into General Electric at these prices.

Is there some risk? Absolutely. However, a staid, economic giant like GE does not cut its dividend without fear of massive blowback. And at these prices you can count on a 10% return going forward plus gaining any capital gains from the gains in the share price.

So, in closing, consider stocks and dividends not just stocks. There are two ways to profit in the market and share appreciation, while certainly the sexier alternative, is not the only game in town.