The S&P is overvalued because the index has outperformed BH?
And most of those gains have mainly come from someone else's efforts, specifically CBRL
On the plus side I've made about 50% on this stock over the last 14 months or so. Easy money.
Hit it and quit it...and re-hit it.
The article is based on information that has been well known and is well known. This is all information that has been out there for a while, hence the reason the short interest has been so high for SAFM and PPC. Just look at all the sources cited in the article, all public information. Sure, this could have been an interesting article, about a year ago.
A lot of this trade has already played out. Maybe some room left to the downside but I'll accumulate on the way down.
I can model out 1.37 but I'm looking at about a 20% decline in revs and looking at about 5% decline in gross margins. Not sure how likely that is.
Well that's this guy's whole point. The other analysts are way too optimistic he says (not exactly those words).
The $50/mil year average is not accurate because you are looking at data before the accounting changes. If you take out the effects of the investment partnership activity prior to the change in accounting your operating cash is between $25-30 for each year. The $50/year is not what the company is earning for the restaurant business. This past year's operating cash is more accurate at let's say $30million on the high end.
Before taxes BH earned 1.4M for this last quarter so assuming a run rate you get 5.6M for the year in operating earnings before taxes. At a generous 20x multiple (realistically should be lower) of earnings the price per share should be about $50. Assuming CBRL is worth $500M as you say the CBRL stake is worth maybe $240. Throw in the compensation and other nonsense shares are worth maybe $310 on the high side. Not sure how this is 50% undervalued.