Many investors have recently talked about the inflated valuation of Cracker Barrel Old Country Stores (CBRL). I am not going to argue about investors' perception on what CBRL should trade at, but I will argue that the company is not a short. There are several reasons why, from a capital allocation perspective, that it is unlikely that the stock goes much lower from its current levels including: an activist investor, debt reduction and interest rate expense savings, share repurchases, and the opportunity for an above-average industry dividend.
Activist Investor Pushing for a $20 Special Dividend
Activist investing firm Biglari Capital (which focuses almost exclusively on restaurants), recently sent a letter to CBRL demanding a $20 special dividend (Biglari...
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