Hi Jim,
I know there are many reasons to buy fast hi-growth rate stocks, but very few of these discussions on RAIN relate to history of similar companies and fundamentals of the stock.
As I've previously mentioned, a P/E of around 100 is not a low risk venture. Things must proceed ahead perfectly to prevent a serious downturn. It seems to me that a reasonable analysis of RAIN would compare it to other theme restaurants that have succeeded in the recent past. Factors like cost per location, projected growth rates and earnings vs. actual growth rates and earnings of competition, quality of management, etc. would be useful to know.
RAIN is currently Capitalized at approxilately 245 million (did I multiply that out correctly?), and it owns about 3 locations. If they increase their number of locations four fold, each location would still have to support 20 million worth of stock (for dividends, earnings, etc.).
It seems that it must expand an awful lot more than four fold to justify a current $26 price.
This is only one way of looking at it, and I may be all wet, but have you or any others done some thinking and/or research of such things?
Thanks,
Holland |
