Exactly. Find the young crowd to be ansy and fleeting and tend to move to the next supposedly great thing. Then we have the quality food hype of CMG. I find it hard to believe that their ingredients are much better than the others. Another feel good story that will crash but you need patience. Probably not shortable either with this liquidity looking for a place to go. But when the timing is right lump this in with the other overpriced sectors of mobile and social.
PBY has been a stinker for a long time. I would think the next worse would be AAP. I do agree this is financial engineering at its finest. The one glaring thing on the balance sheet is their mgmt. of working capital. They are likely pushing out the vendor terms higher and higher as the a/p far exceeds the current assets. I have been watching this for some time and by now would have thought something negative would happen. It keeps getting worse. I do agree that the increasing debt will come back to haunt them but on the other side of the coin based on what they have done already they could pull a rabbit out of their hat and pull something else. Lambert worked for GS. Companies that increase leverage have problems but that is something that won't happen until years later once interest rates go up. Bottom line is they can keep this going longer than most shorts can stay solvent.
Why would you play with fire here. This has been a growing segment and likely will continue at least on par with S&P so you are trying to bet against an upward market and upward segment. Plus this company has been buying back shares. Probably bought back half the float in last decade. Each year more gets bought back. THis will just keep creeping up with the smaller float. I personally have no position but was thinking it was overpriced at 150 and that was long ago.
I say it goes to 100 at which time might be a good stock to buy and hold for a longer period of time. Don't expect big div's though like we got in the past.
I agree. Great place to shop but their costs are higher and their ROI is much lower than their competitors. Can't justify the price here. Last year I bought the premium membership but did not recoup the extra cost in savings so this year I am downgrading to the basic again. I wonder how many people will do the same just to save a little money. I shop at both Sam's and Costco. One thing for sure is that this place is much higher end which is where you want to be in retail. Sam's seems to hire mostly #$%$.
When analyzing the cash flow you can't say net debt free. You need to look at cash and all current assets turning to cash and compare to a/p. All that cash will be used up paying down a/p. At that point you can look at the excess cash and compare to long term debt. Looking at it this way all their cash and most of their current assets except small portion of inventory would be needed to cover current liabilities. In 4th qtr expect big increase in ap which will give them cashflow from operations. But it will reverse right back out in q.1 when those liabilities get paid (60 days or so).
Not a fan of the stock price but OK store. The shortage of ammo is not a CAB problem. You can't find ammo anywhere. My local Scheels Sports is sold out also. It is a country wide problem on certain ammo.
Sounds interesting but something that will be so far out into the future and need so many new rules by FAA that by then AMZN would not be the only one doing it. Five years out this stock will lose this valuation.
That's it. Last year in 4th qtr they borrowed. Maybe it takes place in 1st qtr but it will likely happen. They will have big add back in working capital for a/p at y/e which will take them into next qtr but when those bills are due that is when the cash will be needed. When the first big sellers get out it could get ugly here.
Anyone analyze the working capital of this company. It appears from the prior qtr that it would take most of the current assets ( all but a portion of inventory) just to satisfy the accounts payable. If it were not for the issuance of debt they would have had a tough time generating enough cash to pay for all their obligations especially the large cap ex that has been taking place. With no earnings on these cap ex and the possibility of more borrowings and interest rates creeping up this might be an issue to worry about in 2014.
My question is that you had a bad experience. The earnings were not that great and sales are flat. Plus the multiples are quite high for that level of financial performance. What would make you invest in the company. The burger segment is now in decline and being replaced with fast casual that is geared toward more healthy type ingredients. You could invest in MCD and get a better valuation and better dividend if that is your thing.
You are relying (hoping) that financial engineering pushes the stock higher. That is a big gamble. The estimates for next year (even if they beat and generate .40) would give them a price of $8 with a 20PE. With sales growth under 5% would you be willing to pay 20 PE when you could invest in other areas with a better return proposition.
You won't see $4 on this stock. I am guessing that $7 might be possible. The market is forgiving and it will take two lack luster earnings reports to debunk the optimistic expectations that were generated by mgmt. We had one flat report and it will be next qtr if they report flat sales again that will bring this stock down. My guess is that it took off from the low $6 level and that is where it might go. When the stock dropped to high $7's on earnings I sold some 7 puts on my short to generate income. When next earnings come out I don't want to have any puts open though as that might be when we see the 7's.
Wrong question to ask as they have a different amount of shares outstanding. Plus they are in two different industries.
You seem to have anger management issues. Maybe some time in therapy. This is only a stock bulletin board. Nothing more. Get over it.
The question is why are you worried about their valuations. It is not revelant to anything. Nobody uses it for any purposes that will effect your true valuation. Appraisers will not be using it. It is only for entertainment.
I put my first short in before earnings. Only 500 shares but I will likely hold until we drift down to 7. Likely sell the 7 strike puts for income to close this out. Will let someone else make any additional money on the drop below 7. Then move on to the next candidate. Too many other short prospects to waste too much time in this stock.
When you look at the hype and then just look at the numbers there is no growth here and little expectation that earnings will increase big. Flat sales does not lend itself to outpaced earnings. Look at the forward estimates and give it a fast food multiple and you have a $5 stock. Anything higher is a big time short especially when the euphoria in stocks ends.
Well regardless of the hype this Is still a burger joint and if you look at the earnings forecasts even if they beat you are looking at a company that will be priced way out of line with the future prospects. I don't like the sector but you would be better off with MCD and their lower valuation and better dividend. Can't give this a valuation of a CMG with their unproven history. They got some buzz with the pretzel burger and now pretzel chicken but that is a one hit wonder. Unless the founder comes back from the grave I am a seller here.
I worked in this industry in the past but felt this was an industry in a downtrend. Don't think anything will change here. Market is looking for growth companies that have proprietary products/services. When you do contract mfg there is nothing to differentiate from the next guy. Mostly a pricing proposition. And this company dedicated too many resources to China just when the trend was turning and costs were increasing there. I can see this trending in this price range for a long time.