Intangible Valuation
Value, contrarian, coat tail rider, idiosyncratic research

Pizza Inn's 'Growth' Plans Are Overrated

Pizza Inn Holdings (PZZI) is a pizza restaurant chain and franchisor. The market has taken a liking to PZZI and is pricing it at about $52 million in market cap.

This figure implies that equity investors expect to get about $2.5 million, at a minimum, out of the business on an annual basis. Not only does the corporation lack these earnings in terms of GAAP measurements, it lacks them in terms of free-cash-flow. Further, most of the company's divisions are in decline. Even the growth segment of their business -- their Pie Five concept -- posted negative comps in the most recent quarter and needs to be understood as a markedly different strategy than what the company took on before....

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