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Frisch's Restaurants, Inc. Comm Message Board

  • swampgator1 swampgator1 Mar 1, 2004 1:02 PM Flag

    Relative bargain?

    FRS has about the same eps and likely growth profile as Wendys and trades at a 30% discount.

    In 4 years Cheescake Factory might earn what FRS is earning next year and you get a dividend on FRS along the way and Cheescake is trading at 1.7 x FRS current valuation.

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    • I agree, FRS is a relative bargain. I've noticed the market cap has creeped up to about $143 million. It could be a candidate for inclusion in the Russell 2000. I've noticed with other stocks I've owned is that the stocks pop in April on the assumption they will be included in the 2000 in June. Russell does have a liquidity requirement for inclusion in the index, so this isn't a slam dunk. But I think it would close the valuation gap if it is included in the index. I think the stock is worth $35-$40 assuming eps growth of about 5-10% this year and next. I don't know why the stock traded down here; perhaps technical factors such as 100 dma, etc.

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