Boston chicken has been growing at a feverish rate because they have to. As a recent issue of Business week magazine recently uncovered, this company does not make any money from continuing operations. They LOSE money from same store operations and have been showing profits due to some unorthodox reporting practices. In fact BOST must grow because they generate earnings from loans made to their franchisees to cover their losses!!! What a Ponzi scheme!! The parent company is lending millions of dollars to the store operators to keep them in business. It is the interest income from these loans that are creating the "earnings" on BOST reports. As soon as the chain breaks this pyramid will fall. HARD.
As a matter of fact BOST does not report same store sales as other companies do. They have an odd accounting system setup that skirts this requirement--but enough of the fundamentals, read Business week 3 weeks ago if you want the full details.
I am a technical analyst. I recently picked the tops in both Starbucks Coffee, and Rainforest Cafe to name just 2 restaurant stocks I follow. Boston chicken is about to experience the same senerio that brought both RAIN and SBUX down 15-20% in 2 weeks flat.On the BOST thread I predicted a move to 38 before total collapse. That move happened the next day! 3 days later the stock has retreated back to 36 1/4 on heavy volume--thats the top friends. I see a move of no less than 20% down in the next 2 weeks-- the mid 20's is my target, and yes, I am very SHORT Boston chicken, and very comfortable at these levels. Take a look for yourselves, I would love to hear all comments--Good luck everyone. |
