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Non-Tech : Foodmaker (Jack-in-the-Box Restaurants) -- Ignore unavailable to you. Want to Upgrade?

To: Curtis Cerenzie who wrote (225)	10/24/1997 6:24:00 PM
From: Arnie Doolittle	Read Replies (1) \| Respond to of 338

To all, So what's going on with FM's price? Are we heading for a sea change in FM's future fundos being reflected in its price before the info is public knowledge or is the drop an aberation? IMHO, neither. A cursory review of FM's chart shows a decidedly seasonal pattern the past three years. In both 1995 and 1996, FM peaked after mid-year, started to recover in December, and exceeded its prior high in February. I suspect this happens because FM's biz is better in the summer months and expectations are lower in the 4th quarter ended September. It doesn't help that there's a four month gap between public reports in the 3rd and 4th quarters. The February resurgence is instructive, as the 1st qtr (ending in January) has 16 weeks as opposed to the other three 12 week quarters, thus giving earnings a nice boost during the slow season. But for now we're suffering from any stock's worst nightmare: no news. Not to worry though as we consider: 1. FM will build at least 100 new stores next year. 2. Same store sales continue to meet company expectations. (translation: "We'll beat the street estimates because we're pulling our punches a bit on what we say publicly.") 3. Debt load and related interest expense have decreased big time. 4. Lines at JITB seem be as long or longer than ever. 5. Beef prices remain low. 6. Advertising cost per store will continue to fall as new stores generally are closing gaps in existing markets. 7. The long delayed Vons/Safeway suit is still in the future. (This is mega-significant because of its debt reducing capacity if/when FM wins.) 8. At some point the fast food guys will increase prices on their signature sandwiches and earnings will leap forward. I know, I know. I've been preaching this for almost 3 years. Like a broken clock, eventually I'll be right on this point. (If I live long enough.) :-))) I wonder how much effect the WSJ's front page bearish article on MCD painted the rest of the industry's stock prices this week. The implication may be if MCD awakens, the rest of the industry will suffer. Balderdash - on two points: 1) MCD has a long way to go domestically before it can qualify as "awakened", and, 2) MCD does not have an answer to FM's adult sandwiches. Enough of this tome. Arnie