How many times do I have to repeat the equation at work with the sale of company owned units to franchisees? Please pay attention. The estimate by Morgan Stanley Smith Barney is that they will raise as much as $390 million from the sale of these units over the next three years. These funds in turn will be used to buy back shares as they are currently doing. The estimate is that as much as 1/3 of their present outstanding shares will be bought back over that time period. That will enhance the EPS number accordingly.
Wall Street understands this and that is why the stock is hanging in there so splendidly. The closing of units as announced today is also a plus; it shows this management team is a no nonsense group, on top of things, not afraid to make the right moves to enhance the bottom line. Again, that is why the stock is firm at present.
Please print this out and paste it up on your wall. Then watch the stock perform over the next three years. You will be in for a very pleasant surprise.
Big J in L.A.