Yep, Cosi was a nightmare of an IPO. I remember when some investment bankers backed out and finally William Blair took it public. Two months after that, the two founders, who were managing the company at that time, said the the funds raised weren't enough to fuel growth...and, by the way, we're going to miss the quarter. Wow!!
Since then, and without getting into ultra details (I've posted them here before) the two founders are gone and the company is managed by seasoned restaunteurs and investors.
Up until six months ago or so, Cosi was essentially a turnaround stock, with Forrest and Armstrong recruiting seasoned managers, tweaking the store concept, moving headquarters, do a follow-on, rationalizing costs and, finally, implementing a nationwide franchise support system. All this done while management has consistently updated and communicated with investors.
In my view, manaagement's turnaround is a huge success, so much so that I have confidence that this same team can growth the company.
And so, now it's time to changed to growth mode from turnaround. Management needs to communicate constantly with investors, and that message much be consistent. Management needs to know that COSI has become a show-me stock -- thank you very much for saving the company, now grow it.
Some investors are moving out the stock, seeing that it has lost the turnaround momentum and are impatient to the management its success growing the company. Coupled with a lousy market, the stock has lost more than 40% of its value and has touched 52-week lows...a perfect time for me to get back in.
There is franchise interest out there and, in my view, once there's demonstrable new store openings and a little color in seeing how many new stores will come online at within what time frame, investors might again warm up to the stock.
To close, and with the above discussed, Cosi is a undervalued stock, so much so that, in my opinion, if they half their projections (something I don't expect), the store openings and sales growth is enough to still deem the stock undervalued.
Don't expect this stock to participate with the market; IT'S A SHOW-ME STOCK. WHAT MANAGEMENT NEEDS TO DO IS UNDERSTAND THAT POINT AND COMMUNICATE WITH INVESTORS. AND IF THEY DO THAT, MOMENTUM WILL COME BACL.
Godd stuff you've posted. You know, there are a lot of pumpers & dumpers on these boards. I apparently have more time on my hands since I "fired" my employer last year, to read a lot and respond.
Your comments on the confidence of management and knowledge of history shows you've done DD. My forte' if any, is on the TA side.
The positive news on the TA side is that obviously COSI is oversold. Indicators in a "normal" market would support a buy here. The Sstoch is about to x-over and the A/D line is flattening to hint an accumulation.
Also with the stock to have precipitously fallen for a while now presents a problem for any shorts at this juncture, just as it would longs in an opposite senario.