The average P/E ratio for the restaurant segment is 17.6 , and a reasonable profit margin is 5.5%. If at the end of 2009 GCFB has 50 locations and averages 4.5 million gross per location. I will use a 7% profit margin because of GC lower brewing costs and use a P/E ratio of 25 because they are a fast growing business. If 20 million shares are outstanding, using 7% profit margin and 25 as the P/E ratio we would be at $19.70/share. Not a bad return in 4 years. With 25 million shares outstanding we would be at $15.75 share. Just food for thought.
IHOP (symbol IHP) shares soared $2.94 on a 56% increase in EPS, y-o-y. Goes to show that strong performance can move a stock sharply higher even when the market/sector is getting beaten up.
IHOP Corp Summary: as of 16:00 ET
Symbol Last Change Change% Bid Ask Actions
IHP 47.46 +2.94 +6.60% 47.45 47.75
IHOP Corp Details
High 48.29 52 Week High 50.50
Low 45.35 52 Week Low 37.97
Open 46.40 Volume 587,500
Close 44.52 Price/Earnings 22.26
Bid Size 4 Earnings Per Share 2.00
Ask Size 10 Exchange N
Annual Dividend 1.00 Symbol Type EQUITY
Another stretch, Nuanced.
The fact remains there has been more on balance selling than on balanced buying since it went public. KONA is below its offering price right now.
It is at the moment up 30 cents from its all time low as a public company (do I always have to qualify for this?) two weeks ago. Maybe that's a good sign.
Well, of course my comments about KONA price performance was about the period since it went public. ALL companies go from zero at inception to some value and it is a stretch to say there is something unique and valuable about KONA considering it started from nothing.
In defense of my simplistic approach is that it was not a chart of a selected period of time, it is a chart of the entire price history of KONA... for as long as it has been public, if it needs that qualification.
I don't agree with you at all on my view of BJRI shorts from the time it went from 10 to 5 and then up to 15. If you go to the BJRI thread at the time you will see frequent and detailed rants of mine about what was going on with the shorts then. It was the most significant dynamic effecting the stock price at that time.
I agree entirely that time will tell, it always does. The trick is to predict what it will tell and put your money on the line. KONA has to overcome whatever the market has against it now and you may well be right in predicting that it will do it.
It happens that I bought GCFB in the first half of July when it was going up so I am not that brilliant. I do have a profit even after the recent drop.
You can select whatever periods you want on a chart to make a point but what is stupid is to deny the entire history of KONA, which has been nothing but down, in comparison with GCFB in the same market as shown in the chart I linked in my post.
If you find my posting useless and idiotic you have an easy way to never see them again. Just put me on IGNORE. You might be experiencing some cognitive dissonance by still thinking of yourself as someone who likes to "...get input both pro and con on both stocks...." You don't get that by insulting anyone who doesn't agree with you.
To add to that, it's quite possible that that the overallotment had a negative effect as well. It was something like 13% of the IPO.
Let's say you wanted in but didn't get in on the IPO. So you buy on the open not doing 100% of your DD (out of a fear of missing out)and only find out that the over allotment was exercised after you made the purchase.
Regardless it's nothing to get too concerned about. IMO 10 or so is the floor there and a 30% swing is nothing for small thinly traded companies.
Personally, I don't put much faith in the pricing of an IPO to be an accurate picture of what value the market really places on a company.
Prior to going public, It's the brokerages and the companies telling you what it's worth. The brokerages are selling the story because it's how they get paid. The better they sell the story, the more money which is raised. There are no short sellers or skeptics giving a contrarian point of view or arguing about valuation.
After a company goes public, you got the shorts, the longs, the momentum players all involved. Many of those people haven't been indoctrinated by the brokerages. I seriously doubt if the brokerages involved in Kona's IPO are on the phone daily telling their clients to buy more because it's "on sale." If they are, I guarantee they're not doing it with the same level of fury as when selling the IPO. Why? They already made their money.
Sorry, one last thing. Lets not forget that the KONA ipo was priced at 11. On the first day of trading it ran up to over 13 on very high volume. This is not reflected in the chart which starts with the first public trades which were at the 13 level. Since then, it has spent a lot more time and volume above 11 than below.
<<KONA never had any price increase like that>>
Thats not true Miggie. Just because the company was private you couldnt see it, but somehow the company went from a value of 0 to 50 million dollars.
I think your analysis, which basically consists of a snapshot in time, is overly simplistic. I think the same of your view of the BJRI shorts. But you might be right. Anyway, time will tell. I think KONA most directly compares with PFCB and they are having a very tough time of it right now. KONA is going to have to prove itself, and the market will not give shareholders a payoff until it does.
thats my point - if you bought GCFB in june, yes you are up, if you bought a year ago, you are flat. if you bought earlier in year and sold at low (like i can guarantee you many did)you went from 5+ to nearly 3, an approx. 40% loss. since you say you only like to buy stocks that go up, i assume you were brilliant enought to buy in june. dont get me wrong, i own both, and like to get input both pro and con on both stocks. but your postings are useless and idiotic.
Thanks for the link to the press release. I didn't recall that sales figure in it.
I have read your ananlysis on KONA and I think they are well researched but the fact that I pointed out to you was that the market analysed it and came up with on balance selling and not on balance buying. Current sentiments could well be wrong but all bullish sentiment on the stock to date has been wrong as well.
I'm glad you brought up the 2002 drop in BJRI because I'm an expert on it. It doesn't compare to the KONA drop because in the year prior BJRI went up from around $4 to $10. KONA never had any price increase like that. The drop in BJRI coincided with something like a 10 fold increase in short selling which, in my view, fueled the subsequent BJRI run from 5 to 15 in the next nine months. KONA has only 1 day trading in open short interest. There is no comparison.
Also, there was some kind of scandal at the investment banker that brought BJRI public and they didn't support the issue. This is not the case with KONA. Again, no comparison. There is something that the market hasn't liked about KONA so far.
Don't get me wrong. I have no position in KONA and I wish you luck with it.