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Jack in the Box Inc. Message Board

  • taratara145 taratara145 Mar 25, 2011 3:21 PM Flag

    jack's 5% net profit margin vs MCD's 20%

    why dont they turn jack's into mckedees and immediately get a 15% net margin boost?

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    • The lady from cold and dreary Pennsylvania keeps looking in the rear view mirror. The stock market is a discounting mechanism which anticipates 9-12 months into the future. DUH!!! JACK on that basis has a great one year return possibility. Remember the five keys to this situation: company is buying substantial quantities of its own stock in the open market on a multi-year basis resulting resulting in a significant ongoing cap shrink; there is the hidden value of Qdoba which overnight could tack 3-4 dollars on the price of stock with any announced spin off; private equity groups love the sector and at any time an offer for JACK could surface especially given their strong balance sheet visavis other takeover candidates; the PE ratio based on the year starting October 1,2011 is now at only 12x the consensus $1.87 estimate; there is significant chart support for the stock in the 21-22 area. So don't you dare sell this baby and wake up one morning sobbing in your pillow, the way Miss Tara will lament having ignored Big J.

      Good luck and God bless, Big J in L.A. (retired security analyst The Foristall Co., members The Los Angeles Society of Security Analysts. I followed the lodging, gaming and restaurant industries for many years)

 
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