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Famous Dave's of America Inc. Message Board

  • innerstory innerstory Jul 16, 2008 2:24 PM Flag

    Does anybody have insight?

    Looking for someone who has some idea of what is really going on at this company? Not looking to hear it is a pos but something about how the business is performing. The market thinks this company is having major problems since it keeps making new lows when other restaurant stocks have been holding their own.

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    • I bought back in recently below $6 for a couple of reasons. One reason is that I believe that Vicuna will be buying heavily after earnings are out. If you look at insider trading on July 1, you will notice that Vicuna bought 111,000+ shares and then sold the same number the same day. I think they realized that the quarter had ended June 29 and could not buy shares during a lock out period since they had become 10% beneficial owners recently. The 222,000 shares that they traded that day represented 3 times the previous week's volume and resulted in a 13% decline on the day. The heavy volume of these 2 trades distorted the real picture and caused traders to sell. Actually, the SEC should have looked into this possibly illegal insider trading. However, what we do know is that once the lock out is complete after earnings are announced, Vicuna will be trying to buy that 111,000 shares and probably more. I also think earnings will be respectable. There were no company owned stores opened in this quarter so there will be no pre-opening expense which dragged down earnings in the prior two quarters. There was also a lot of other extraordinary expenses that will not occur this quarter. The company has locked in a pork contract which only has a 1% price increase this year so commodities are less of a concern than the market realizes. They continue there quest to become the first nationwide bbq chain by entering the states of Idaho and Delaware for the first time. The company has a 28% earnings growth rate over the last 5 years and is expected to grow earnings 22% a year for the next 5 years. If you are a value investor, you would realize that this is a bargain at the current price. We'll just have to see. I'm hoping I guessed right.

    • ask yourself some great questions - Does company have earnings? Are they investing in new company stores / Growth? Are Franchise stores closing and why?? Is story still fresh, new exciting etc??? Now you know why stock is setting new lows - USE YOUR BRAIN!

 
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