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

To: Dennis who wrote (50)	4/1/1999 7:08:00 PM
From: Steven Dopp	Read Replies (1) \| Respond to of 71

I am not in the restaurant business and really know nothing about it. That is part of the reason I am questioning my analysis of this stock, precisely because I don't know anything about the business. However, the current ratio is dangerously low compared to most other companies. Although I don't know what the average current ratio is for restaurants, I know that Outback has a reasonable current ratio (and a correspondingly higher p/e ratio). APPB has had a lot of problems during the last 12 months or so. The defection of Applesouth and the underperforming (money-losing?) Rio Bravo restaurants. It could very well be that the sale of the Rio Bravo chain will mark the beginning of a real turn-around for this company. However, this possibility must be balanced against management's anouncements of their intent to buy back another $50 million in stock this year. Where is the money going to come from to do this? I';m not convinced that a stock buyback with borrowed money, like they did last year, is in the best interest of the shareholders. I've seen other companies do this sort of thing and blow up shortly thereafter (Safeskin comes to mind).