If you take the one penny after hours rise into account, JACK has outperformed the market magnificently over the past two and a half weeks with 12 days in a row in which it is up in price. This has occurred in a very weak market environment. Whose foot print might it be? For example, today we saw a relatively strong performance on very large volume of 965,000 shares (several huge blocks all on upticks right into the close). Highly unusual given the overall market weakness. Management, the CFO, indicated at the Jeffries conference in New York City this week that Qdoba has the potential for 2,000 units. Increasingly the identity of JACK is taking into account Qdoba almost on an equal basis. This is very significant because once people start comparing Chipotle and Qdoba, the only difference is that Qdoba has yet to raise funds in an IPO attendant to any spinoff such as with the McDonalds Chipotle development. That would mean a major infusion of cash to expand the business and leave the balance sheet a thing of beauty as well. Whereas Chipotle has twice as many units as Qdoba, the latter can do some serious catching up if they would expedite that public offering tied to a spinoff. Very exciting times for JACK holders, and this coming week we may get some inkling of what's going on.
Big J in L.A.
tara do you only come and talk your bull after the market been down bad eight days in a row ? I am glad to see you you back. It means I will be making money on jack again. I bought at the close yesterday at $21.65. I Have not been able to get back in since I sold at $23.50 a share back in june and yes tara I may trade it for only a $1.00 or $2.00 profit as may times as I can. I think it will take anywhere from a day to a week to make my profit. Better then a CD. Let,s see if a short or long comes out better from here at $21.65
If Chipotle is adding 140-150 new stores a year, Qdoba will lose its potential quickly. Slow investment is not an option when Chipotle is doing everything possible to dominate the market and take share.
It would be infeasible to sell off the Jack in the Box operations to finance a more rapid expansion of Qdoba. There are solid earnings being generated by the JACK part of the business, and the company is refranchising (selling) some units already with lower AUV levels. It would take a long time to expand Qdoba given limitations on the site selection process irrespective of how much cash they received upfront by some buyer. This could not just be done overnight. No, the appeal of JACK is the combined two-concept operation. Management is doing the right thing by expanding Qdoba on a measured basis through both company developed stores and via franchising. Likewise, it is a sound strategy to buy back their own shares in the open market to increase the EPS number. Someone fantasizing otherwise should propose the above poster's idea to any MBA grad to see how empty a prospect it holds. Once the company finishes its reimaging program and cap-ex stabilizes under $110 million a year, there will be plenty of cash flow to expand the JACK burger chain in the other 31 states in which they do not operate currently. Big J in L.A.
Been to Chipotle a number of times and they ARE good and, most importantly, they execute VERY well. Not sure they are worth their multiple but I can't argue with their performance. I have never been to a Qdoba but I've heard others say that they are actually better than Chipotle. If so, that is saying quite a lot. Obviously, as I posted some days ago, the stock caught at least one buer. That seems to have continued on a weak tape. Interesting action. Lower oil prices and commodity prices certainly impact the group. FYI: might also take a look at BAGL. Acting very well and Einhorn is a large owner.
Yes, there just has to be something going on here. The final share tally today is almost 1.8 million shares. JACK may trade that much stock once or twice a year at most. I give management high marks for telling their story nationally, even more so than other restaurant chains. They participate in every institutional forum, conference or convention they are able to. The story will get out on that basis. And the story is more and more Qdoba. I have eaten at both places, Chipotle and Qdoba. Hard to tell the difference really. The action announced today that CMG is raising prices has got to encourage Qdoba to do the same. I keep hearing that not only is Qdoba every bit as good and more so than Chipotle in quality and variety, but they are price competitive as well. This should enable Qdoba to bump prices higher near term. Assume no buyout or spinoff, still JACK has something that no other restaurant company does. And that is a very aggressive share buyback program that will continue well into the future as cap-ex requirements decline following the refranchising effort. This is something the analysts just do not mention at all, that is, a further meaningful cap shrink to enhance EPS indefinitely.
Big J in L.A.