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Papa John's International Inc. Message Board

  • takeitfromme takeitfromme Dec 16, 2000 10:58 AM Flag

    Gen. Jack, I am expecting additions at

    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!

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • from the General (since you asked for
      them).

      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.

      To be concluded in Part II.

      • 1 Reply to GenJackripper
      • 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.

 
PZZA
42.34+0.32(+0.76%)Jul 11 4:00 PMEDT

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