Jean-Pierre,
I agree, the restaurant sector is picking up, with the stronger companies moving more quickly (i.e. CAKE). I read an a month or two ago (maybe in the LA Times?) that featured the resurgence of urban entertainment areas and discussed Il Fornaio and their Pasadena location which was opened several years ago. Also, in looking at the Cafe Odyssey slide show on their web site, they mention ILFO and CAKE as two restaurants with food that they hope theirs is comparable. I find this to be a good sign as it seems that the awareness of ILFO is growing. I am waiting to do my stock buying until December, as I feel that tax-loss selling of restaurants could be huge. I did buy some CODY at 3/4 about 2 weeks ago, and so far it is looking like an intelligent purchase. The 10Q-SB released Friday mentions that insiders have invested 1 million recently. RAIN seems to have based from its ridiculous lows, especially ridiculous considering their growth rate and profitability. While their profits were not significantly higher this year over last, this is quite an anomaly due to several factors: 1) a change in accounting practices requiring immediate write-off of preopening expenses, and 2) less interest income due to less cash. Share prices have been further discounted due to SSS-comps down though they are for only 6 locations out of over 20, 4 of which have only been open 2 years, and the 5th being cannibalized by another location in the same area. However, their growth in earnings due to operations and not interest still rose nearly 30%, a fact much overlooked by investors. Overall I am very bullish about restaurants right now. It is the first time I have seen a sector down so much so quickly in what is still a bull market. -Dylan |
