PZZA (people or person) due to the recent lack of proper management of Wall Street's EXPECTATIONS. I am not sure they have anyone there that is very experienced at doing this well.
Missing the mark happened about a year ago where Wall Street was led to expect one thing and got another. No changes were made then. Now it has happened again.
I think it would be prudent for them to hire someone with this type of experience (managing Wall Street's Expectations) that could focus on this aspect of the business.
Otherwise, I feel the fundamentals of the company are just fine and it should ge a great long-term buy. I think it is a growing company that needs a little seasoned experience with managing financial expectations.
What do you think?
P.S. I got a pizza the other day and the person that delivered it , dropped it on my front porch......ooops, that was me, I went to the store and picked it up! It seems like this is the only type stuff on this board. It is either complainers or cheerleaders with not much MACRO-business discussion. Ugh!
The General has had the luxury and (he believes) the objectivity of assessing PZZA from the sidelines for more than 20 months, since it triggered a technical sell signal back on 4/01/99, when it broke down below 41.000.
He has not had a dog in this fight since then, albeit he has maintained his monitoring of the company and its stock. He took his respectable long-term profit and increased his accumulated position in SCRI to an overweighted one at that time. You can see what that move has done by reference to SCRI's historical table.
Back then, for the week ending 4/02/99, PZZA's Research page here on Y!-F, indicated a consensus 5-year EPS CAGR of 28.1% versus its Restaurant Industy's 19.9% 5-year CAGR (a 41.2% "superiority").
Currently, those figures are, respectively, 19.8% versus 18.6% (reduced to a slim 6.5% "superiority" in expected long-term growth).
Yes, it could be argued, that, as a company grows larger, its growth rate should be expected to decline. The General, in earlier postings a couple of years ago allowed as much.
But, takeitfromme, ask yourself honestly, given the perspective of a 5-year horizon from a viewpoint a mere year and a half ago (that 28.1% consensus CAGR held until the week ending 6/18/99, when it was lowered to 27.6% and the industry's CAGR was then at a lowered 19.4%), does a 29.5% decline in PZZA's EPS CAGR versus a 4.1% CAGR decline for its industry over that intervening period of time (18 months) not tell you something about the Street's altered opinion of PZZA's long-term prospects?
As the General had said at the outset of this message, he's enjoyed the luxury of being able to look at PZZA fondly, albeit somewhat more objectively and dispassionately than those whose assets are still at risk here and who are likely under water with it.
This thread's 'market-mavin," rationalizes PZZA's performance (such as it's been) with the excuse that it's a result of the economy slowing and he's been expecting PZZA to further erode his investment-asset in it for some time. He's surprised that it didn't do so sooner, he tells us.
Well, let's examine what the market's been thinking about the prospects for the Retail-Restaurant Industry over the past 6 months, courtesy of IBD's data base.
In each issue, IBD ranks 197 industry groupings according to their relative price-strengths in terms of their market performance. While the table ranking them, numerically, usually appears inside the last page of the paper's Section A, in the reporting of a stock's performance for the proximately preceding session, that numerical ranking for the stock's industry grouping is converted to one of 5 letter rankings ("A" through "E").
So, for example, if a stock's industry group ranked, numerically, from 1 to 39, it would be designated as being within an "A" rated industry grouping. 40 to 79, numerically, would merit a "B" rated grouping, and so forth. A "C" rated grouping would be considered an "average" performing group with "D" and "E" rated groups being decidedly moderate-to-markedly weak performers insofar as where the market's comparative price strength is concerned.
In light of the foregoing, what's been the record for the Retail-Restaurant group?
6 months ago (per 12/14/00's issue, page A21) it ranked 28th out of 197 (an "A" group).
3 months ago (per 12/18/00's issue, page A21) it ranked 57th (a "B" group).
A week ago (per 12/15/00's issue, page A25) it ranked 8th (an "A" group) and, currently (per tomorrow's, 12/18/00, issue), it's 13th (still an "A" group).
In summary, over the past 6 months, while the economy has admittedly been slowing, and during which time the DJIA has declined 2.61%, the Nasdaq Composite has dropped 31.01%, the S&P Composite has fallen 11.27%, the Mid-Cap 400 is off by a mere 0.25%, and the Russell 2000 is 10.58% lower, the industry group in which PZZA is a constituent, has been, relatively-speaking, one of the stronger price-performing groups.
As an example, in last Friday's (12/15/00) issue, in its regular Friday feature, Your Weekend Review (page B20), IBD listed 11 companies in the restaurant industry that met its criteria for inclusion in that feature.
The 4 criteria that must be met are as follows:
1. Price > $7.00.
2. Earnings Per Share (EPS) rating =/> 85.
3. Relative Price Strength (RS) rating =/> 85.
4. Its price is within 15% of its 52-week intra-day high.
Listed below are those 11 companies, in order of how they are currently ranked here on Y!-F (per the link on a stock's Research page).
The General has employed "x"s, as necessary, in an attempt to maintain columnar integrity and alignment. The EPS & RS percentiles shown have been updated from the IBD issue of 12/18/00 and might not coincide in all cases with the values shown in the issue of 12/15/00, which reflects Thursday's (12/14/00's) market activity. All other data shown is per the issue of 12/18/00.
The order in which the data is presented is as follows:
1. Stock symbol. 2. Ranking per Zacks Research on Y!-F. 3. EPS percentile ranking. 4. RS percentile ranking. 5. Sales + Profit Margins + ROE rating ["A" (= Best) through "E" (= Worst)].* 6. Accumulation/Distribution rating ["A" (Strong Accumulation - Buying) through "E" (Strong Distribution - Selling)].
* Two (2) of the 11 stocks listed, FRS & MRG, do not have an S+PM+ROE rating because FRS trades on the Amex and IBD doesn't show that factor for Amex-listed issues, or, in the case of MRG, it is reported in the NYSE's "secondary" listings because its ADV < 10,000 and IBD doesn't provide that factor for "secondarily"-reported NASDAQ or NYSE issues.
Here are the 11:
RARE: (04), 92 / 97 / B / B xxRI: (05), 94 / 92 / B / B xMRG: (07), 90 / 86 / - / B xCEC: (08), 94 / 89 / A / B CHUX: (09), 88 / 91 / A / B xJBX: (10), 89 / 92 / B / A xEAT: (12), 91 / 95 / B / C SONC: (17), 92 / 89 / A / B SBUX: (20), 96 / 90 / B / B xFRS: (22), 95 / 93 / - / A xDRI: (26), 88 / 95 / B / A
and then we have:
PZZA: (30), 93 / 42 / A / D
Back on 4/01/99, PZZA was sporting an EPS rating of 99 (none better) and its RS rating was in the 70s. And, to paraphrase the lyric, "Baby, look at it now."
Looks like it's going to take a Part III to conclude.