Been on a long vacation so thought I would check in at this time. Glad to see Tara finally getting religion and jumping on board. BTW her oil trades must have been a disaster for her. I have made the point all along that we need to preserve capital more than anything else in this volatile stock market and uncertain world. That is why I selected JACK at a time when I could position, with the sale of puts primarily, at a net cost of about $18. So I have never been underwater in the stock. I figured why risk the high fliers until they came back down, which many of them now have at least before today. Whereas I have other stocks in my portfolio, I like JACK for two principal reasons. First, and most impressive, is the possibility of a takeover. Especially with the stock down we might see some serious accumulation and then a tender at somewhere around $24. Then the bidding begins and I can see a takeover in the $27. to $28. area very easily. The second plus is Qdoba which is a Chipotle clone. That fast casual area of the restaurant business is exceptionally hot and management can either spin off Qdoba or decide to make it the principal vehicle for future expansion. So far the latter seems more likely given that they continue to buy franchised units at a reasonable price. The recent market decline has put a new spin on matters and I would now imagine a takeover is a greater possibility. Qdoba is a coveted operation and a YUM brands would be delighted to add these two concepts to its restaurant portfolio. So hang in there and accumulate even more shares on weakness. You will not be sorry longer term. And remember; this investment "game" is all about survival of the fittest. So let that be your primary goal: preservation of capital.
While some of your analysis makes some sense, I think you have lost sight of one of the fundamental principles of investment analysis - which is:
- You buy crap you get crap
The fact that the restaurant sector has been on fire over the past year or so and "Jack" hasn't followed tells me that their management team isn't doing the right things. Do you even go to Jack in the Box? They don't have the traffic that other newer fast food concepts have - they have been left in the dust. And if they were managing this company effectively and the Qdoba brand was worth anything - you would have already seen some movement in the stock - just look at CMG?
Hate to tell you but at this point - Jack is Crap - but I wouldn't short it. Maybe at some point you will be right and they will get bought out and get a new management team to extract some value out of this mess.