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Non-Tech : Applebee's Neighborhood Grill & Bar (APPB) -- Ignore unavailable to you. Want to Upgrade?

To: Duane S who wrote (8)	11/25/1997 9:06:00 AM
From: Steven Dopp	Read Replies (1) \| Respond to of 71

Alas, I don't have the SSG in front of me (again). We looked at other things than just the SSG. We also look at the following (as memory serves me...): Current price 52-week high price 52-week low price return on equity return on assets price to book ratio 5-year avg annual revenue growth rate 5--year avg. annual eps growth rate 5-year avg. annual dividend increase (%) dividend yield Zacks consensus analyst rating analyst consensus 1-yr growth rate PEG ratio price to sales ratio We take all of these items and put them in a table. At our last meeting, we did this for six stocks. We handed out the table, along with a stock comparison guide (generated through Investors Toolkit) for the companies. Then the chair of our stock selection committee gave a report on the relative merits of the various candidates. When we looked at restaurants, we found Outback Steakhouse to be very similar in terms of its SSG and the above-referenced numbers. What turned it for us in favor of Applebees was that APPB's debt-to-equity ratio was half that of Outback (the only measure where there was significant variance between the two). Also, Outback had just announced their intention to close 8 of their Italian restaurants in the 4th quarter (not a good sign). Finally, we decided that Applebee's had a better opportunity to remain current (better ability to change their menu) than Outback. If steaks or Australia ever go out of fashion, we don't know how Outback would deal with it, whereas Applebees can just change their menu as needed.