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Famous Dave's of America Inc. Message Board

  • prichard.richard prichard.richard Mar 3, 2010 2:08 PM Flag

    Strong Buy - Target: 8.40

    An S&P quantitative evaluation of DAVE dated February 16, 2010, assigns a fair value price of $8.40 with a strong buy recommendation. The recommendation is based on a "proprietary quantitative model" which ranks stocks from Group 5 (most undervalued) to Group 1 (most overvalued). DAVE is in Group 5, the most undervalued group.

    S&P also has a timing index, either positive or negative, which in the case of DAVE is negative. This means that DAVE has a somewhat lesser chance to outperform other stocks in Group 5.

    In any event, based purely on quantitative considerations S&P considers DAVE significantly undervalued. This is probably not news to investors who follow DAVE closely.

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    • Earnings report = status quo, little change from previous quarters. Franchise operation results continue to decline at faster rate than results for company owned locations. Company business finance execution remains steady. A new concern - the company states it will record a one-time gain to account for the value of the recently acquired assets (New Jersey-NY bankrupt franchisee) being higher than what DAVE way, there were multiple bidders, DAVE paid prevailing market value at the time and under the circumstances. DAVE shouldn't play accounting games over asset values. Further, DAVE states the newly acquired restaurants WILL NOT be profitable in the next year; in the conference call management better explain WHEN THE UNITS WILL BE PROFITABLE. Can't be disappointed when expectations are muted.

    • Undervaluation of DAVE is not news. Feltl and Company currently has a price target of $9.

      Thanks for posting the info even though I don't find S&P very useful when it comes to timing.

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