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Famous Dave's of America Inc. Message Board

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  • Reply to

    Birthday Meal

    by appletonrocks Jan 22, 2015 8:24 PM

    Combination causes major gastric challenges.

  • I can't decide between DAVE and Red Lobster. I might do both, why not. Maybe a rack for lunch and a crab souffle for dinner.

  • If they could fry them up that would be a great appetizer. Probably needs a little parmesan or chipotle seasoning but if not overcooked, worth a look.

  • Reply to

    Called The Manager In Appleton

    by appletonrocks Dec 31, 2014 5:51 PM

    Appleton is a progressive community, although the current leadership of the city is sort of lame.

  • Reply to

    Richmond closings

    by casual_observer_27 Dec 31, 2014 9:38 AM

    You brought up commodity prices. Beef prices are through the roof. Almost doubling in price. How will DAVE pass through the rising food costs to customers? Margins should go down as hey are for all restaurants that serve meat. This is a basic fact and can be seen across the board.

    I agree with you that closing 10% of the stores and the worse performing ones is a necessary move. Those stores are losing money and a drag on earnings. However the number of stores Rensi has guided that he will close is roughly 70% of all the co. owned stores to bring the ratio of co. owned stores to franchised ones down to 15%.

    Basically they want out of the Co. owned store business and into the pure franchise business. Sounds like right out of the McDonalds playbook right? DAVEs is not McDonalds. And Rensi has a horrific track record outside of McDonalds with his recent complete failure with his burger chain.

    Further by closing so many co. owned restaurants DAVE should see a shrinkage in the size of the business by 30% - 50% over time with all the losses written off for closing all those stores. While that is the prudent thing to do, DAVE should have a valuation reflecting a shrinking business, not a growing one. It is not growing.

    Therefore a PE of single digits will be more appropriate and eventually you will see DAVE trading at $5 - $10 based on 5 - 10 PE ratio.

    Maybe one day DAVE can figure it out and come up with a new concept and menu and start growing again. At that time IF they can grow and make nice margins. Then DAVE might get a stock price reflecting a growth stock with earnings? Meanwhile DAVE goes down to $5 and in a couple years if DAVE can get back on track it grows? IMO.

  • Reply to

    Richmond closings

    by casual_observer_27 Dec 31, 2014 9:38 AM

    DAVE is closing the worst performing restaurants. This will make a difference because these 10% of stores account for more than 50% of the SSS decreases. You're saying that closing these stores is a bad thing? Management has a goal of a 15% margin and have a plan to get there which includes this action. I also believe the economy is improving and, along with low gas prices, will provide more discretionary spending including increase restaurant visits. Compared to first quarter of 2014 which had the polar vortex keeping people indoors, the 2015 first quarter will be a big improvement. Small stocks have also been the best performing sector for the 12 months prior to a Fed rate increase in the last 5 major long term bull markets and DAVE falls in this sector. I'm also predicting this company will be sold or go private within the next 3 years.

  • Reply to

    Called The Manager In Appleton

    by appletonrocks Dec 31, 2014 5:51 PM

    Been through Appleton once and my only memory was the big John Birch Society building. Felt like I had stepped back into the 50's. Couldn't believe that was still thriving after all these years.

  • He told me the strip club ideas for DAVE after hours, while creative, would be difficult to staff since many of their servers are young women. Said no way would he expose them to that.

  • Reply to

    Richmond closings

    by casual_observer_27 Dec 31, 2014 9:38 AM

    But they added that they will close 4 more co. owned stores for a total of 7.

    Plus taking what Rensi said on the conf call it would appear they will close almost all of their co. owned stores so that the mix is 90% franchised stores vs. 10% co. owned stores.

    By reducing the co. owned stores by 7 of the worst performers plus losing the one that burned down... That should bring revenues down significantly. Greater than 10%. However the same store sales and margins will improve slightly.By reducing stores DAVE is going backwards. Shrinking sales, not growing. While that is probably the prudent thing to do it makes clear that the chain concept is struggling.

    The valuation for a turnaround restaurant chain that is shrinking and trying to come up with a new concept that might save them? Maybe 3x earnings or $3 per share. Currently DAVE is at 30x earnings. Go figure. Makes no sense.

    IMO the reason for the highly inflated valuation is hedge funds and followers have bid up the shares based on Rensi's reputation as a restaurant pro. However while Rensi worked at the proven concept of McDonalds and did a good job there, his only foray into a new concept with his high end burger chain in Chicago was a complete bust. So the inflated value makes no sense especially since management has zero credibility, not making anything better, and if they ever figure out how to turn DAVE around it is obvious that things will get worse far before they get better.

    BTW. The next biggest BBQ chain that is a comp to DAVE is Smokey Bones. They almost filed BK and was sold to a PE firm giving the business zero value. Sold for the value of the RE. By that measure DAVE is worth very little.

  • DAVE trimming the low hanging fruit. Without these 3 locations, overall earnings would have been 4 cents higher for the year and same store sales would have been a half point higher. Obviously one of the underperforming markets which was mentioned in the last conference call. This will be a good move for DAVE in the long run. I have to admit I don't necessarily agree with closing the stores with no notification to the employees. They showed up to work with a sign on the door saying that they were no longer in business. It's another example of why employees hate to see hedge funds take over a business but investors love to see hedge funds take over a business. No nonsense approach to getting rid of the dead weight. In this case, I suspect the abrupt closing may also have to do with getting this asset impairment charge into 2014 rather than 2015. I personally like to be on the same side of hedge funds rather than betting against them. There are over 800,000 shares shorted which may get squeezed a bit if the restaurant sector heats up in 2015 like I predict it will.

    Sentiment: Strong Buy

  • News today. Closing 3 stores in Virginia plus another 4 stores on top of that for 7 total. Closing 7 company owned stores is a huge chunk of DAVE's business. Not a good sign.

    Rensi warned we will see more closings in the future. I guess they should close most of the co owned stores if they are to get to the ratio of 10% - 15% of co owned stores to franchised ones. But closing so many stores seems to be admission that the concept is flawed and is not working.

    Shrinking rather than growing is negative. The stock is trading at a ridiculous valuation if DAVE continues to shrink. It is trading with a growth stock valuation when clearly it is not growing.

    but at least perhaps by closing the worst of the bunch they can at least survive and figure out a new concept that works. Maybe chicken?

  • When DAVE opened a location in Canada this year, it broke the sales records for them. Considering you don't have a lot of the smaller mom and pop bbq restaurants to compete with, it makes sense to open more stores up there. Good hearty food like that will go over well. A Canadian investment firm recently bought 5% of DAVE so maybe they can be influential. And put a pork belly sandwich on the menu.

    Sentiment: Strong Buy

  • Just before serving....creates a layer of glaze that can't be beat.

  • Everything I'm looking at right now is showing additional gains for DAVE over the next week and half.

    Sentiment: Strong Buy

  • My indicators are showing a nice move up for DAVE before the closing bell rings on Friday.

    Sentiment: Strong Buy

  • Reply to

    Is Famous Dave's a Farce?

    by brucekaratz Dec 17, 2014 8:52 PM

    They still suck. Bruce is correct. They should sell out to someone who knows what to do.

  • Reply to

    Is Famous Dave's a Farce?

    by brucekaratz Dec 17, 2014 8:52 PM

    Free cash flow is a lot higher than that. They have bought back 40% of their stock over the last 5 years. Recently, they have been paying off debt. They will be bought out in the next year or two.

  • Reply to

    Is Famous Dave's a Farce?

    by brucekaratz Dec 17, 2014 8:52 PM

    50 Restaurants means the 50 corporate ones they own. They also have 140 franchise locations on top of that. They should be earning $2 - 3 million net on just the franchises alone. This company only earns half of what it should.

  • I have not read any reports, but how do they make under $5 million in net income but own ~50 restaurants. I do not live in a region they are prevalent in, but the restaurants I have seen of theirs look nice and expensive. If just their corporate owned stores made $150,000 after tax each, then that is $7.5m in net income. Where am I going wrong?

  • I've been reading a lot of positive comments on the restaurant sector in 2015. Economy doing well. The low price of gas provides move discretionary income. Same store sales up compared to last year's polar vortex. All good news for DAVE.

    Sentiment: Strong Buy

DAVE
32.46+1.05(+3.34%)Jan 27 4:00 PMEST

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