Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, restaurant operator Ruby Tuesday (NYSE: RT) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Ruby Tuesday's business, and see what CAPS investors are saying about the stock right now.
Ruby Tuesday facts
Headquarters (founded) Maryville, Tenn. (1920)
Market Cap $335 million
TTM Revenue $1.27 billion
Management Chairman/CEO Samuel Beall III CFO Marguerite Duffy
1-Month Price Change 298%
Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 121 of the 219 members who have rated Ruby Tuesday -- or 55.2% -- believe the stock will underperform the S&P 500 going forward. These bears include kdakota630, who is ranked in the top 0.1% of our community, and TSIF.
Last Wednesday, kdakota630 brought attention to the stock's seemingly unwarranted price action:
Shorting the 60% pop today. Despite a good earnings report, let's not lose sight of the fact that it IS a restaurant in the midst of an economic downturn. People still need to eat, but they don't need to go to restaurants to do it when money is tight and unemployment rates keep rising.
In a pitch from two days later, TSIF elaborated on that bearish sentiment:
Ruby Tuesday posted a slightly better outlook than expected this week. Mr. Market is "hungry" for any good news. ... Ruby Tuesday's earnings were not anything to write home to momma about. Earnings were down almost 60%, same store sales were down 6.8% (although other eateries had 9-10% declines), rather than expanding 43 locations were closed (closing costs?). While better than expected Ruby Tuesday still forecasts a loss in 2009 of $0.45 to $0.55 per share. Cash flow and cash on hand is dismal.