**Personal To AV******
Andrew,
Maybe this will cheer you up! Although the Pack won, I will give you my pick anyway. It was a wonderful game. The Pack scored less that I thought and the Pats more than I thought. Very enjoyable overall. I liked the Chewy 2 point conversion best cause it sealed the fate for the Vegas. HA HA. I had intended to go back and do more research on this stock for you so I could back up some of my statements with sources. Unfortunately, I don't have the time to do that. I am a CPA and busy season is upon us. Not to mention the fact that our office is short two people this season and the IRS chose this time of the year to audit one of our better clients. Life's a ^%@#$. Beginning to feel like Robin.
With the preliminaries out of the way, here is the brief discussion I can offer currently. Some of this comes from my research back in Sept and Oct when I first became interested in this stock. Some of it is off the top of my head (I decided to write this to you now as the stock is moving back into the buy range) and further research may prove my statements somewhat incorrect, just so all the ground rules are laid out.
The stock is Rainforest Cafes. Before you go off saying "What, a hamburger joint," take a look at the chart. The stock has great range up and down. It consistently moves between 20 - 22 to 30 -34. In between are several moves where 3 to 5 points can be had. One of the people in my office has been trading it for more than a year making 3 or 4 points at a crack. The stock currently is under 22, again. As a trading stock it offers a fair amount.
The company is fairly solid. Can't remember the numbers exactly, but they have something like $72 million in the bank. They have 5 or 6 restaurants currently with aggressive expansion plans over the next few years. It costs something like 4 to 5 million to build a new restaurant and that investment is usually recouped in the first year. The restaurant usually is profitable in the first year as well. (This is the statement I wanted to double check, because I believe the Plant Hollywood's etc.. take several years to recoup their initial investments and to become profitable). They have a share buyback program in place, for what that is worth.
There is always a line at these restaurants with lines exceeding a couple of hours occurring regularly. I have not been to one yet, but the locations appear to be sound for the most part. The first was put in the Mall of America. They have one at Disney, one at Gurnee Mills mall near Chicago and I think one out east. They have a web page that tells of the locations and you can get the press releases. It is at rainforestcafe.com
The question is will they have staying power. Due to the income stream, the locations chosen and the ability to pay for the restaurants currently, I believe they will. Due to the limited locations currently I also believe that over the next couple of years as people find out more about these restaurants and they open in their "back yards" the stock will take off. Could it be a Starbucks? I don't know, but I do know that more people will buy once they have been to one. It is the buy what you know type of thing.
Anyway, that is my pick. As promised it is out of your field of expertise. Good Luck and I will be interested in your analysis if you choose to research it yourself.
--Scott. |
