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

To: jeffbas who wrote (6158)	3/2/1999 11:54:00 AM
From: Freedom Fighter	Read Replies (2) \| Respond to of 78485

The Restaurant Business: In my research, I've been finding that you can still find an occasional company that appears cheap on earnings, free cash flow, has some significant growth prospects, and has average return on equity or above. Granted these are not great businesses and have above average risk. But I was wondering.... When I've looked at the occasional takeover price, there appears to be no standard valuation method in cash transactions that I can see. How does Wall St. value these businesses in general? Are they using a higher cost of capital than average, multiple of sales, cash flow, earnings. There seems to be some pockets of value in this area in a market where I can't find anything. I own Applebees and Sbarros right now. I bought both at prices that seemed to good to let get away. But I'm getting interested in a few others also. Just curious to how Wall St. thinks about this business. Wayne Crimi