Ken and Lizard Lick, did you see the write-up on GRLL on the Financial Connection ? Here it is:
<Internet Financial Connection:
Roadhouse Grill (GRLL) and MicroFrame (MCFR)
August 14, 1998
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John Montgomery of the Bridgeway Microcap Limited Fund 800-661-3550, provides the following stock ideas on Roadhouse Grill (GRLL 5) and MicroFrame Inc. (MCFR 3). Below is the write up.
The shares of Roadhouse Grill dropped like a brick last year, falling from a high of $8 1/4
in July of 1997, to a low of $3 by year end.ÿ Their shares are now trading around $5 and
John Montgomery of the Bridgeway Microcap Limited Fund thinks their shares are poised to move higher.
Roadhouse operates 43 restaurants primarily in the South. One of the reasons why their
stock dropped "like a brick" last year is because, there was a higher than anticipated
operating loss going into the December quarter. "They have debt/equity of .6 which is
30% below the industry average," says John.ÿ "They have $0.50 per share in cash and
internal growth is very favorable." He also likes the fact that they have very strong cash
flow and have been able to grow revenues at an impressive rate over the last few years.
Based on earnings of $0.30 for year ending December 1998, Roadhouse trades at PE of
16 versus an industry average of 25. "If they only hit the $0.30 and it traded at the industry
PE, that alone would push the stock price up 50% from current levels," says John. He
views this years earnings and 1999 estimates of $0.36 as "overly conservative". He also
thinks Roadhouse's shares could possibly hit $20 over the next 18 months, as their growth
rate is reflected in the stock.
Another stock John likes is MicroFrame Inc. They are a software company that designs and develops security, network management and remote maintenance products for voice and data networks.ÿ MicroFrame reported a 51% increase in revenues last quarter. "They are in an
explosive industry and they could provide 40% earnings growth over the next few years," says John. He believes that MicroFrame's shares should be worth $5 a share right now and could hit $10 a share over the next 18 months.> |
