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Josh Hutheson
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I am a professional author, former Marine, and investment enthusiast.
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  • OpenTable And E-Rewards Network: Thriving In Support Of Food Industry

    As the US Restaurant industry continues to thrive and generate record profits, stocks in the space continue to rise. Both, casual dining and fast food stocks, are some of the strongest stocks around even with the recent market sluggishness. Well-known dining stocks like Yum Brands (YUM), McDonald's (MCD), Darden Restaurants (DRI), and DineEquity (DIN) are all sitting next to 5-year highs and have all beaten the S&P 500 handily over the past 5 years looking at performance with DineEquity being the biggest gainer at close to 200%.

    (click to enlarge)

    With the dining space registering such strong returns, related companies have been benefiting.

    OpenTable (OPEN) is the world's leading provider of online restaurant reservations, seating more than 12 million diners per month via online bookings across more than 28,000 restaurants. The OpenTable network connects restaurants and diners, helping diners discover and book the perfect table and helping restaurants deliver personalized hospitality to keep guests coming back. The OpenTable service enables diners to see which restaurants have available tables, select a restaurant based on verified diner reviews, menus and other helpful information, and easily book a reservation. In addition to the company's website and mobile apps, OpenTable powers online reservations for nearly 600 partners, including many of the Internet's most popular global and local brands.

    The big news for OpenTable this summer has been its partnership with Facebook (FB) that was announced last month. The two companies struck a deal that will allow users to reserve tables at restaurants via a Facebook app, as the world's No. 1 social network continues to expand its mobile services. In an announcement on its website, Facebook said the feature would be available on its mobile pages for more than 20,000 OpenTable restaurant customers across North America. This was seen as a positive for the OPEN as Facebook's massive user base is expected to boost OpenTable's clientele within a very short span of time. The deal also gives OpenTable an edge on recent competition from Groupon (GRPN) and Yelp (YELP) in the online reservation industry. The market sent OpenTable's shares up nearly 8% to 52 week highs on the results.

    Overall, OpenTable has been one of the best growth stories over the past year as the stock is now up 80% over the past year and this should continue to be one of the top gainers in the market with its sustainable business model producing revenue growth rates in the mid-teens. The market has recognized management's efforts and has slapped the company with a forward P/E based of 40, a multiple typically reserved for some of the most high-quality growth stocks on the market. So yes, you are paying up but the results and the company's innovative culture speak for themselves.

    E-Rewards Network (OTCPK:ERNI) specializes in building and implementing key strategies for firms with high-potential and capabilities of achieving sustainable growth. E-Rewards Network provides professional support for its consolidated subsidiaries through operational business management, financing, and controlling activities. The company targets the following business sectors: the customer loyalty management market, the gift card industry, the online food ordering industry and the marketing consulting industry. That's the official company background; however, the focus of the company has been on the online food ordering industry.

    In a recent news release, the company discussed the growth the company is seeing in the restaurant business. ERNI announced that as of August 26, 2013, Earn IQ, the company's flexible dining rewards program, has officially launched its rewards program with an adequate number of participating restaurants in selected areas of Brooklyn, Queens, Manhattan, and Long Island. The program, which had been in its pilot phase since February 2013, has garnered 2,000 registered members since its start -- a number that expects to grow to around 10,000 over the next few months. The growth is real as already the company has strengthened its revenue projections and asset valuation based on what executives are seeing in the uptake of Earn IQ.

    The success of OpenTable suggests that the future is bright for ERNI as there will always be demand for helping diners bringing consumers through the door. Online ordering is the next frontier for ERNI and looks like it is looking in the right direction. Last summer, German food-ordering site Delivery Hero raised $49 million in a round of funding for German food-ordering site Delivery Hero. OpenTable sports a market cap of $1.7 billion, so ERNI has nowhere to go but higher with continued growth in the online food ordering business.

    Sep 03 1:32 AM | Link | Comment!
  • Recent Underperformance In Gold Stocks Provides Opportunity

    Gold miners have underperformed the gold commodity over the past three months to the tune of 10 percentage points in a comparison of the Gold ETF (GLD) and the Gold Miners ETF (GDX). This has created a buying opportunity, according to Sterne, Agee & Leach. The broker noted that North American precious-metals producers that focus collective attention on capital discipline and operating-cost maintenance should recognize in relative valuation the increased value placed on gold despite fighting geologic, metallurgy, capital cost and political challenges. Here are a few that could benefit from a reversal in the gold commodity versus gold miners trend.

    Barrick Gold (ABX) is the gold industry leader in production, reserves and market capitalization. The company operates globally, with a portfolio of 27 operating mines and advanced exploration and development projects located across the world, and large land positions on some of the most prolific and prospective mineral trends.

    The stock has struggled and is now hovering just above 52-week lows but the company now seems to be planning to take shareholder-actions to help its shares. The company is looking to sell assets in 2013 in an attempt to do that. CEO Jamie Sokalsky is reviewing the company's assets and the company has received approaches from companies interested in some of its assets and is continually reviewing its entire portfolio, Sokalsky said. In addition, "there are many people that see our assets as quite attractive," Sokalsky said.

    MineralRite (OTCQB:RITE) is a smaller company that goes unnoticed by the Street. The company is engaged in the processing, certification and sales of precious metals including gold, silver, and the platinum group metals. Using various proprietary and ecologically friendly processes and technologies, the company extracts precious metals from mining operations ore, reclaimed mine tailings and high value concentrate material.

    Based upon current trends in the mining industry, including mining, recovery, processing and spot pricing, MineralRite Recovery Group intends to specialize in the extraction of precious metals from ore bodies and reclaimed mine tailings. Service fees ranging from 3% - 15% on ore processing are charged. In addition a 15% recovery fee is charged on the additional commodity recovered (ranging from 20% -30% enhanced recovery). Management has a track record of identifying undervalued mineral and precious metal reserves on 3 continents, and therefore MineralRite Sales Group will focus on identification, certification and sale of undervalued mineral assets throughout the world.

    Recently, the company announced that it signed a Letter of Intent with a United States mining company to provide processing services and equipment to extract gold and other precious metals from the clients ore deposits.

    Goldcorp (GG) is one of the world's fastest growing senior gold producers. Its low-cost gold production is located in safe jurisdictions in the Americas and remains 100% unhedged.

    Just on Monday, the company announced gold production and cash costs for 2012 as well as provided near-term guidance. The final calculation of operating costs has not yet been completed, but total cash costs for all of 2012 are expected to be approximately $315 per ounce of gold on a by-product basis and approximately $645 per ounce of gold on a co-product basis.

    The company further noted that its emphasis has always been on growth in cash flow as opposed to growth in new ounces. GG will remain disciplined stewards of shareholder capital by focusing on high quality, high return projects and returning capital to shareholders in the form of increased dividends.

    For 2013, Goldcorp expects to produce between 2.55 and 2.80 million ounces of gold in 2013. Production is expected to build in the second half of the year based on the ramp up at Pueblo Viejo and higher grades late in the year at Peñasquito. Gold production is forecast to grow approximately 70% over the next five years to 4.0 to 4.2 million ounces in 2017.

    Tags: GDX, GLD, ABX, GG
    Jan 09 6:49 PM | Link | Comment!
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