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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: yard_man who wrote (131878)10/30/2001 12:47:46 PM
From: reaper  Read Replies (1) of 436258
 
Tip -- much better shorts around than KKD
lots of retailers / restaurants with excellent liquidity risk as well as business risk out there; for example (IMO) Linens and Ann Taylor earn less than their cost of capital every day they are in business and are thus good BK candidates if life gets a little tough. i would say the same (again, IMO) of CPK and Buca.

KKD is obviously expensive (as is Panera Bread) but its an inherently pretty good business plus they have off-loaded much of the liquidity risk to their franchisees. Sure, it'll go down a lot if they miss a comp, but companies with dreadful returns and high leverage will see their equity shrivel to zero very quickly. i think there was somebody on this thread who used to call them "terminal shorts".

Cheers
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