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Sonic Corp. Message Board

  • usa501 usa501 Feb 4, 2002 12:54 PM Flag


    First of all, what a great super bowl. Well, I am back. I thought this stock was way overpriced two splits ago. Now it is way overpriced.

    Warning signs are all there.

    Too much insider selling
    Too much long tern debt
    and Mcdonald's will soon wake up.

    This stock reminds me of Rally's. It was going up, up, and away. They were advertising on all the major networks, and then the roof caved in. They fell to about 50cents a share.
    I think Sonic could fall to $4.00 a share. Well, thus far i have been incorrect in my predictions for this stock. Nothing goes up forever.

    Good luck to all.

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    • Hope this doesn't post twice, last post dissappeared, as to your question ea. owner is responsible for his own upgrade. I believe they have a deadline by which they must have the upgrade performed.
      As all the stores conform to new look, IMO I believe you will see more good earnings reports in the future. I base this on just observations here locally. The new look seemed to bring together the right mix for new business. They won me over 1st as a customer, and 2nd as an investor. Don't rest on your laurals SONIC, we expect great things. All in my opinion and good luck to all

    • The upgrade is paid for by individual owners. I believe that all the franchises have a specified time by which they must upgrade their stores to conform to the new look. Good management top to bottom. Thats why I believe that this co will continue to do well. They know how to market and keep good image. As the existing stores perform their upgrade it will only but enhance everyones bottom line. Along with the new openings SONIC looks great for 2002 and hopefully beyond. All my opinion of coarse, but they won me over as a customer first, then as an investor second. Good luck to all. Good luck to all.

    • I was wondering since sonic is remodeling a lot of their stores who foots the bill? Does the francise owner pay for the remode and new signs does the sonc corp. pay or do they split the cost? Anyone have any info please reply.

    • I have 22 years with this company and personally am turned off by any negative comments about MY company. Sonic was chosen as one of the 200 most attractive stocks for a couple of years. Look for the stock to move rapidly 2nd quarter.

    • Thank You for your honesty in admitting that you could have retired had you invested in Sonic instead of taking an advesarial position. It is just suspect to me that someone would take a position as you have since 1999, over 2 years posting negative things about this company. Thats a lot of energy aimed at one company for an aweful long time, IMO that seems like a PERSONAL ISSUE,NOT AN INVESTMENT ISSUE.
      As to your trying to keep other investors from falling prey to a poor investment, why would you care to help people you never met or no nothing about. If you were that noble and really wanted to help people you would be more balanced in your facts. So that point is mute. In fact your misinformation could cause the opposite result by causing others to fall in the same missed opportunity as you.
      If your opinions where objective and had some points of merit that would help in making investment decisions they would be welcomed. The only reason I address your posts is because your input plays on peoples emotions,and is based on misinformation. This company means nothing to me EXCEPT as a investment to try and make some money. If they fail to provide that end to me I will go my way and look for other opportunities, but it will be based on facts and results. These are my opinions and investments can be risky with any company no matter how good they look, ex. Enron.
      Good luck to all and good investing

    • I just love it when usa501 posts "MAJOR SELL" I might just go ahaed and buy more SONC tomorrow. Everytime this guy predicts this stock is going down the toilet it ends up 20% higher. Great indication this stock has much more upside left in its tanks. No plunger needed here. I can sleep a lot better at night knowing I own a great company in Sonic.

    • usa501, I see you're back. Please document WHY you feel the way you do. Barring the unforseen, I don't see your "sky is falling" viewpoint in SONC's future.

      I've been at this investing game a few decades now. I've made all the investing mistakes, and continue to find new ones to this day. One thing I have found, though, is that steady growers (not to be confused with FAST growers) tend to continue growing for a long time. SONC is not a "hype" stock. You don't see continuous streams of press releases from the company. You don't see lots of "glitz" from its CEO or other officers. What you do see, though, is steady, well-planned growth, to the tune of 20-25% a year. You also see where they are planning on moving north, and are tweaking with formats that will work better in colder climates like where I live (Cleveland). I also see warmer markets that are large that SONC has not yet really penetrated (CA and FL are noteworthy examples).

      Let's look at your bullets, one by one:

      * Too much insider selling. I'm seeing less of a correlation to "normal" insider selling on the price of a stock. While there are exceptions, insider selling, as a rule, has generally not been a good indicator of a stock's future price. To see a great example of this, go over to PNRA, and check out their stock price. Today, it's hitting new highs. Their CEO Ron Shaich has been a large insider seller for about 1 1/2 years.

      Too much LT debt. You've got me there. I don't like LT debt. But, with the rate of expansion for SONC, they have managed the debt well. Plus, their cash flow is very strong; that helps when you take on some debt. Anyone that has a mortgage most likely has one whose pricipal amount exceeds their annual income - yet how many defaults are there? It's low.

      MCD will wake up. And pigs will fly. In Chicago, MCD has what I believe is a prototype "dessert" shop on the Navy Pier. What a hit. It's been there for a while. Any time I've been there, it's busy. MCD has not rolled out the concept nationwide. Stupid. But that's MCD in a nutshell. Their food is lousy, their service is lousy, and they no longer differentiate themselves from the crowd (nor, apparently, will they ever, if history is a guide). Plus, their management is afraid to make a decision - Heaven forbid they make a mistake...

      Rally's comparison. Rally's were rapidly and irresponsibly franchised. All you had to have was a name, and you could get a franchise. I've also learned over the years that the tougher it is to get a franchise, the better for the investors. SONC is following a responsible franchise model. It has and will serve them well for years to come.

      Nothing goes up forever. You are quite correct. Someday, your prediction will be correct. BUT, you will miss out on several 1000% of gains. Doesn't sound like a winning formula to me.

      Your quote: "Thus far, I have been incorrect in my predictions for this stock". So right you are.

      Disclaimer: As always, IMHO. Position disclosure: Long (SONC); Flat (MCD, PNRA)


      • 3 Replies to wallstreet_jim

        Just don't see how this stock keeps going up. When I am out at lunch time the Sonics just don't seem to have much business around here. Even the Sonics with good locations. Several of the Sonics here have very poor locations, and I just don't see how they stay open. I know it is bad pr to close a restaurant. Maybe the banks get nervous.

        I see too much of insiders getting their great options one day and selling the stock the next day. Maybe, in other cities Sonics are doing better than here.

        I still see this stock as speculative-in my opinion.

        Reply to message 646:

        As of Jan.1, 2002 Arthur Andersen is the new auditors of Sonic.


      • I noticed they have also moved farther south with 1 restaurant now open in Mexico.

      • Excellent Post wallstreet. I have watched this company for some time. Your points are all in line and well stated. I was drawn to this company mainly from a customer standpoint. As a customer you can tell a lot about a company by using their service. If their service is good, usually there is good management behind that good service. This in turn leads to good bottom line, good bottom line makes for good investment. Due to my job I travel alot and I personally have not found a bad experience at any of their locations I have visited.
        My only read on his posts are he has an agenda that has nothing to do with investment. He seems to only want to spread doubt and offers no sound advice. Again good post and as you these are only my opinions.

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