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Here are some factors which may or may not be responsible for the price fall.
1. A number of analysts have cut their earning estimate for 97Q2, 97 and 98. Currently, many analysts have 97Q2 earning at $0.15, instead of $0.16, as previously expected.
2. About two years ago, BREW was a wall street favorate, trading at more than $30. However, it reported a few disappointing quarters. Since then, the financial community has been quite nervous before the earning release. As a matter of fact, its 52wk low ($8 5/8) was reached the day before reporting 97Q1 result. It would take a number of good quarters to restore investor's confidence.
3. Restaurant is a very bad sector as far as stock price is concerned. It is one of the worst performing sector in the past year or two. In addition, things may not change in the near future due to competition, tight labor market, and the rise of minimum wage in the Fall.
4. Given the state of the industry, BREW has been doing quite well as far as its business is concerned. It has been improving in the past three quarters. Let us see if the improvement can continue in 97Q2.
5. On the other hand, BREW's stock has been moving nowhere. If 97Q2 result comes out on target, and if company's expansion plan is on track, the current price offers a good opportunity for LONG term investors.
Steven
ps: Per BREW's IR, 97Q2 earning is to be released at the close of July 28.
pps: BREW's conference call is open to analysts only. It does not offer the playback of the conference call either. I DO NOT like it. I believe that such an arrangement does not offer a level field for the individual investors. If enough people call the company and ask for the conference playback, the company might change its policy. |
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