Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: MCsweet who wrote (5304)	11/21/1998 2:08:00 AM
From: Brendan W	Respond to of 78595

I considered RAIN as a short at $30. The cost of the individual restaurants are very high (like $5 million) and I question the true growth prospects and wondered about food quality. This is from recall over a year ago.

To: MCsweet who wrote (5304)	11/21/1998 9:43:00 AM
From: sonyNchair	Respond to of 78595

On the subject of beaten up mortgage lenders, I stumbled across what looks like a real bargain while screening for "January Effect" plays. LFCO is a West Coast S & L, which makes mortgage loans to sub standard credit risks. Down from about $26, now trading about $6 ( I bought at 4 3/16). Was slammed with the other mortgage lenders, plus had a merger deal fall apart. My cursory review of the Company indicates that they have a stable source of retail branch deposits for their lending and are not dependent on the liquidity of the junk bond market as a source of funds like many of the mortgage REITs. Also there has been insider buying at higher prices. P/B(mrq) is about .67, P/E(ttm) 2.85. I don't specialize in banks, so I may be missing something, but it looks like a real bargain, unless the economy tanks and unemployment skyrockets.

To: MCsweet who wrote (5304)	11/21/1998 12:31:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78595

MCsweet: re: RAIN. Yes, given some of the finance numbers I scan for, RAIN could work. I've passed on RAIN (I'll think some more now about it now though). I had thought earlier about RAIN vs. DANB. As Brendan mentioned, these restaurants are very expensive and so, that is a drawback because it takes a lot of volume of sales to pay for them. Risky because there are plenty of examples where costly buildings/sites have lead to restaurant bankruptcy. On the other hand, the expense could be a competitive advantage -- to spend that kind of money successfully, the company had better be structured to have access to capital as well as skill in selection and construction. I passed on RAIN because 1) I couldn't figure why people would keep coming back to them; 2)it seemed they were making more money on their T-shirts than on their food. And as Brendan mentions also, food quality was iffy. (That was my impression, not supported by any facts that I have.) DANB, on the other hand, also has costly restaurants, but seems to get repeat business for entertainment (again that's just my guess). RAIN could be a value stock: DANB surely isn't. I decided to go with DANB. Paul Senior

To: MCsweet who wrote (5304)	11/22/1998 6:05:00 PM
From: Shane M	Read Replies (1) \| Respond to of 78595

MCsweet, FWIW, I understand that RAIN is to open a restaurant here in Nashville when a mega-mall called "Opry Mills" opens. The mall is being built by Gaylord Entertainment and the owners of the Mall of America. Depending on the growth of the megamall concept, themed restaurants such as RAIN could have continued opportunity to grow. IMO, food quality needs to become a central focus at these types of restaurants, however. A Planet Hollywood which opened here and was HOT for about a year is now having trouble exactly because food quality is simply not there. Shane