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Panera Bread Company Message Board

  • freshbread4u freshbread4u Mar 17, 2003 5:40 PM Flag

    Time to step back

    We have now had the irrational bump up for the market (which , of course came after the irrational fall). What can one make of it? Apparently the fear of war is no big deal, it is the fear of uncertainty that drives stocks down. What nonsense! The truth is that there is probably more uncertainty now than there was a week ago.

    And now a note for the perpetual longs (like Hot Panera) -- now is a good time to write covered calls if you are long IMO. For the August 30 calls, one can get $3.30 per contract. That's about 12% cash on cash for an annualized return of well over 30%. Given the way that this stock bounces around, the time value of the calls stays high, so there are plenty of rolling opportunities in the future.

    If the stock goes up, the worst one can do is get a 35% return. If it goes down, (as I believe it will), you can always buy back the call for a profit.

    Of course, if I were you, I would sell, but you really should hedge despite your optimistic view.

    Position disclosure -- surprised it went up this much. And (for WSJ) flat.

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    • Mr. Fresh,

      I agree with much of what you outlined regarding what is moving PNRA at this time. I have said much the same thing also. I further note others picking up on this train of thought, which makes me uncomfortable. I will have to

      Rethink It

      P.S. Mr. Frank's decision to sell was a bit premature, no? (and Mr. Monster's agreement, as well. Speaking of Mr. Monster, I got a good laugh about his complaint that others have a religious fervor regarding their pet investing views. No one is more "religious" then he.)

    • "I realized that you don't know what growth means. Growth means % increase in EPS year over year. In Pnra's case it is 35-40%."

      -- The key is one is actually dumb enough to believe or use 'non-normalized' earnings as a true measure of value. It is not, and never will be. "Growth" should be growth in cash flow in conjunction with sales. Even that can be manipulated. Reported earnings?!? Hah!!! Good one......Good luck to all, except those who actually believe in reported earnings (and the growth of 'them') as a measure of value......

    • ""inevitable international stores" There's a lot of suburban sprawl in Europe? China? You're joking right?

      "the likelihood of another concept" That's a winner or a loser. How many times has this been tried and failed by companies with better track records than pnra? The odds of a hit are slim to none more likely the latter wtih the au bon group."

      -- Frank, you are 110% right on with your post. The level of unrestained bullishness reflected above puts the term 'rose-coloured glasses' to shame. To not have an ounce of 'healthy skepticism' is sickening and downright scary. I have met many such 'individuals' -- & they don't seem to last. I expect the same in this case. The post above is so funny, that if the original poster wasn't so serious, one could have a good laugh. Unfortunately one can only be left with genuine pity. The worst thing that could happen to this mighty mo' momentum idiot is that they might earn a few nickels and dimes here and there. They will think they actually are smart, and then WHAMMO on to the next one where they lose all the gains + more........Save your breath, you are right on.........Good luck to all............

    • I realized that you don't know what growth means. Growth means % increase in EPS year over year. In Pnra's case it is 35-40%. The principal cause of the dramatic increase is the new store openings and the margin increase as overhead is spread over more stores, more stores are served by each commissary and various efficiencies are implemented. The final cause of EPS growth is comp increases. If you think weather didn't cause P2 sales to decline 2 or 3%, you are entitled to maintain your view. But when you say that weather only had an effect for 2 days and only in the Northeast, you're downright stating falsities. Wall Street Jim and others have posted about Ohio, Illinois and St. Louis all having terrible weather this winter. The Northeast had extreme weather for many more days than 2. I find it funny that you would call me a pumper. Why? Because I sold 80% of my holdings and have written Aug 30 calls against my remaining 4000 shares. While 25 to 30 was a no brainer IMHO, I don't expect the stock to go much higher from here in the short term and it certainly wouldn't help me if it did.

    • Yes, you're pumping. You may not like the name, but it is true look at your posts.

      "Pnra and Darden are day and night." What then is a fair comparison? The way I see it, people were right to believe 3 years ago that Panera was a hot young thing, but today it's middle-aged and sagging, and the stock price and P/E are reflecting and will continue to reflect that.

      "Pnra is growing" Again, sales are going, leaving, get it. Let me remind you 4 weeks ended Feb 22, 2003 DOWN -1.7%, 8 weeks ended Feb 22, 2003 DOWN -0.5%.

      "inevitable international stores" There's a lot of suburban sprawl in Europe? China? You're joking right?

      "the likelihood of another concept" That's a winner or a loser. How many times has this been tried and failed by companies with better track records than pnra? The odds of a hit are slim to none more likely the latter wtih the au bon group.

      Take the money and run.

    • People who have nothing truthful to say on the merits, sadly engage in name calling. Pnra and Darden are day and night. Pnra is growing more than twice as fast as Darden which is growing at about 15%. Pnra is not "maturing". Even without inevitable international stores and the likelihood of another concept, Pnra is only at about 1/3 of its ultimate size. Greenberg wrote a spurious negative piece only after Pnra had fallen from 37 to 25. His timing, and apparently yours, is that of the classic contraindicator as Pnra has done nothing but rise since his piece. The facts won out this time.

    • I read the 2-25-03 Greenberg article, that's it, and I've seen his anaylis turn a stock on it's ass so you best be writing those calls. Greenberg's main critcism though, as you noted was the issues surrounding Dallas and all the problems PNRA had with it.

      The Darden Restaurants comparison is mine and it's valid, and interestingly you don't say anything on that. The fact is, and you know this, as soon as PNRA matures the stock fizzles. It's just a matter of when, and I say it's sooner rather than later especially in a company that limits itself to the suburbs

      Did you read? "It's growing" ha! Take a look and don't try and blame this on "weather" what b.s. One or two bad days in the NE doesn't cut it. Recall all those canibalizing stores in St. Louis. The growth is going...

      4 weeks ended Feb 22, 2003 Company-owned comps DOWN -1.7%
      8 weeks ended Feb 22, 2003 Company-owned comps DOWN -0.5%
      4 weeks ended January 25,2003 Company-owned comps up .8%
      4 weeks ended December 28,2002 Company-owned comps up 1.2%
      12 weeks ended December 28,2002 Company-owned comps were up 2.5%

    • Pnra will never have as many stores as SBUX. But that's not the point. SBUX's market cap is 10 times that of Pnra's. The valid comparison takes into account things like how mature each concept is, what is the PE, what is the growth rate going forward for each, among others. Pnra wins on all counts big time. You say Pnra is a "modest chain". Not for a company that only has 30 million shares outstanding, no debt and is growing fast. You seem to be trying to justify Herb Greenberg's view. The sooner you realize that he and Cramer are complete assholes, the better off you'll be IMHO.

    • Goat, I think you're smoking instead of eating grass. PNRA ain't even close to SBUX, an international phenom with little overhead and no franchising.

      PNRA is a modest chain at best focusing on SUBURBS, which limits expansion. Try Darden Restaurants Inc http://finance.yahoo.com/q?s=DRI&d=t (Red Lobster/Olive Garden) for a reasonable comparison. P/E 14.

      The winds left PNRA's sails beginning in January 02 at a P/E peak of 89. The current P/E of 40 will be cut in half in 03 putting PNRA at $20 based on 03 estimates of 0.99.

    • goatsuckingshortmaggot goatsuckingshortmaggot Mar 18, 2003 10:59 AM Flag

      Open your ears. He sold 80% of his shares at a FAT profit. Jeezzzz

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PNRA
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