Concerns are: Tenants not diversified by industry; tenants won't be financially strong enough; and landlords don't like restaurants.
Need more top line growth ... don't see it!
According to WSJ article published June 11, 2013.
Also, a lot of restaurant leases include a "kicker" in the rent based on tenant gross sales. Say you are a landlord: What idiot is going to trust a strip club on sales?
Event driven short sellers covered after the settlement was announced, so Thurs. price spike was understandable. However, once the analysts have time to study the settlement, they will realize what a drain it will be on cash flow over the next two years. Plus, financial strength is weak, as plaintiffs probably realized $15M was the max RICK could afford to pay without going bankrupt on them. With settlement on Pole Tax looming, extreme drain on cash flow will starve RICK of financial oxygen for the foreseeable future. Faithful RICK followers will finally realize price can't increase without an increase in free cash flow, leading to further declines in price over the following two years. Nevertheless, once all the liabilities are settled, the prognosis for FYE 2020 looks bullish!!!
In this age of electronic banking, only two luxurious super-sized bank branches are really needed: One in VA; one in NC.
Insurance isn't a growth business ... just slow and steady.
Realtors will inevitably go the way of travel agents.
Other little businesses are a distraction.
Large "fee income" really just penalties that make customers mad!!!
Rick too concentrated in texas!!! smart money is bailing!!! every bank in texas will soon fail!!!
Once the shale dominoes begin to fall, it will spread to the financial markets and real estate, devastating the energy region. Just like investors missed the tech bubble bursting in 2000, and the real estate bubble bursting in 2008, they are blind to the unfolding crisis! For example, read the Bloomberg article:
"Cheap Oil Is Squeezing Property Owners in Energy Hubs"
Aha! Fact volume is so high but price isn't moving up means ... they are already unloading!!!
When one has the right name on Wall Street, they can do that ... unload without driving the price down, that is!
Significant competitor Monarch Bank (MNRK) has a similar mix of businesses; much of the market area overlaps; has a lower P/E and slightly higher P/B ratio; has analyst coverage; institutional shareholders; files with the SEC; highly regarded management; clean balance sheet; already promotes its stock; and as a smaller bank is more of a buyout target.
Even the doubters have to be surprised at how poorly this performed ... things must be bad.
Franklin had some heavy hitter Wall Street type investors. Now they hold TOWN.
They call over to Barrons ... talk it up ... then in a few weeks they will unload it!