Hi Labrador,
Well you beat me to it...starting up a new message board on SI for KONA. I bought in to KONA with a relatively large stake in the past couple of days, with the goal of averaging down should this continue to fall.
I have been hunting for the next big thing in the retail/restaurant chain sector. I invested in COSI many months ago based on the strength of the chart and positive changes in how the restaurant chain was doing business and it has done pretty well. I invested in Jack in the Box (JBX)based on the Qdoba chain (although Jack in the Box stores outnumber Qdoba 10:1) and the strength of the parent chain - although that investment has been flat. I invested in Dave and Busters when it was a turnaround and caught Red Robin Gourmet Burgers on the way up but was a little late.
This sector, unlike most others, has good visibility on growth for companies that have a successful strategy. 2 stores at $2.5M a piece mean $11M in sales growth. 4 stores next year is another $22M in revenue. 40-50% growth isn't bad and a nice ROI to boot.
Look at the comps: Panera Bread, PF Changs, Outback Steakhouse, Brinker International, Krispy Kreme, etc. That's what I'm after with KONA. KONA has a good mix of a high revenue per store model, high-end look and feel to the restaurants, a tasty moderately priced menu that is reminiscent of Outback's Roy's chain that is growing 12%. The company itself looks good too. On the brink of profitability, a little more than 6M shares outstanding and lots of geography to grow in.
Good luck with your investment and don't say I didn't tell you!
Tom |
