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Non-Tech : Foodmaker (Jack-in-the-Box Restaurants)
FM 27.190.0%Jan 8 4:00 PM EST
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To: David Kuspa who wrote (78)5/9/1997 11:16:00 AM
From: Arnie Doolittle   of 338
 
David, investors know about the wholesale sales and that's not a factor imho. Also investors are aware of FM's 52-53 week year and that the first quarter is 16 weeks, the remaining three quarters are 12 weeks. So I don't think the answer to yesterday's stock performance lies in FM's past fundos. So we must look at TA. Remember, FM does NOT have a recent history of gapping up after earnings announcements. Au contraire, the stock has tended to run up prior to earnings and pull back after the announcement. Since we didn't get much of a runnup before the earnings announcement, what's going on? Simply this: Interest in FM is not at the fever-pitch mode yet. Folks are not looking in the rear view mirror; they're looking forward and wondering what, if any, impact MCD's phoney-baloney 55 cent Big Mac will have on FM. I predict a delayed runup to the 13 1/2 area over the next several weeks.
BTW FM announced today that they will add 110 new stores next year, each averaging $1.2 million sales. I think they're pulling their punches and they're really trying to figure out how to staff and open nearly twice that number.
FM has a potential price of $20 by 12/98 imho.
As to earnings for the remaining two quarters, I think 25 cents each may be a stretch. 81 cents for this year and, to steal from a Jack In The Box tv ad, "About A Buck" for '98 is enough to propel this stock to 20 next year.

Arnie
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