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  • The Good Times Should Get Even Better For Good Times Restaurants [View article]
    A lot of food for thought, so to speak: 27.3% revenue growth on 1 new Bad Daddy's, and another for about two months of the quarter to go along with the 37 GTIM stores is outstanding! BD's appears to be doing great and the existing GTIMs appear to be doing amazingly well, too. They are sitting on two very successful concepts. SSS growth has been phenomenal. Looks like growth is the priority, so I wouldn't expect a lot of profit until they get BD's going well. The Bad Daddy's franchise business is just getting starting for them, and the second successful deployment of the concept in the Rockies complements the Carolina success beautifully and it appears to validate it. Franchising both could create high growth going forward, but I am thinking that BD's likely has much higher profit potential since they already have 4X the revs. Should learn a lot more tomorrow.
    Dec 8, 2014. 06:03 PM | Likes Like |Link to Comment
  • Weak global comps for McDonald's across major segments [View news story]
    racc, when I was about 20 I still ate at McDs; my kids and their friends went and still go all over the place, including SBUX and WFM to eat, but not McDs any more. WFM has pretty good food cooked and you can buy it by weight. I was mainly talking about the trend...it is away from fast food unless it is perceived as healthy, fresh, or different. I agree they aren't big competitors, though.
    Dec 8, 2014. 02:34 PM | Likes Like |Link to Comment
  • A Fundamental Analysis Of American Realty Capital's Likely Dividend Cut [View article]
    Steve, you may be right, and personally, I appreciate contrary opinions; I certainly don't have a crystal ball. However, if you look at the typical BDC it doesn't look like they are placing a special discount on PSEC. IOW, if ARCP comes out with a 10%-20% cut, and the AFFO is close to Brad's numbers of $.9-$1.00, then ARCP's price is grossly out of line with comparable REITs, unlike PSEC post-cut. Stocks can rally quickly--like in the blink of an eye--and you can easily miss the upside waiting for the all-clear sign. ARCP is already up >10% since the bottom, and that gives no credit for the divvy. There are certainly risks moving forward, so I wouldn't bet the farm on it. One could also argue that if PSEC is cutting before any rate increases, that is a sea change, not a wave. ARCP is a wave. Is it a tsunami? We will see. If ARCP cuts 20%, it still returns ~8.5% on the dividend alone at this price. That is pretty cheap for a REIT.
    Dec 8, 2014. 12:08 PM | 2 Likes Like |Link to Comment
  • A Fundamental Analysis Of American Realty Capital's Likely Dividend Cut [View article]
    Gratian, I think there was a lot more to making the money than just momentum. Brad was arguing to invest in REITs for a number of reasons and they did outperform most of the major averages, and most of his picks did better. I agree on ARCP being oversold. I just thought some of your comments were a bit unfair to Brad, like this one:

    >>I actually believe that you are the perfect market timer, the buy high and sell low type of deal.<<
    Dec 8, 2014. 11:45 AM | 7 Likes Like |Link to Comment
  • American Airlines Group Reports November Traffic Results [View article]
    Well, I think we have a lot of info already. I came up with 10.91 Bn for the combined numbers last year, back of the envelope. (I'm not an accountant, so I could be missing something.) If total ASMs are up slightly and PRASMs are flat, then revs should be up slightly. The analysts estimates are calling for 10.3Bn--a rather significant drop! I think we will be closer to 11.0. If you put in their margin numbers you are looking at a nice beat. With the weather and gas being so unpredictable, I am sure AAL is being conservative. If oil stays down and the weather stays good, I think we will be out of the top end very slightly, or at least at the top end. I think $1.7-$1.8 is possible if all stays peachy. The early snowstorms did a number on November, but I am sure they have some snow priced in as Winter hits--I don't remember last year too well, but I think it was nasty? AAL looks very strong to me.
    Dec 8, 2014. 11:28 AM | Likes Like |Link to Comment
  • A Fundamental Analysis Of American Realty Capital's Likely Dividend Cut [View article]
    Mike, the difference is that the rent is not collapsing. Oil prices have dropped below many of the deepwater breakeven points. I think you are confusing a sea change with a wave. If ARCP suddenly announces that rents have collapsed then $6 is reasonable. If ARCP affirms anything close to Brad's numbers, it will likely rally, even with a small dividend cut.
    Dec 8, 2014. 10:30 AM | 4 Likes Like |Link to Comment
  • A Fundamental Analysis Of American Realty Capital's Likely Dividend Cut [View article]
    Gratian, I enjoy reading your comments, but I don't think that is a fair depiction. I bought a lot of REITS after the big drop last year on Brad's advice and some have rallied so much I sold them for valuation reasons alone. ARCP was the one loser he came up with (that I bought), but there were a lot of winners. Brad is a real estate guy, not a day trader. I would read his very solid advice on real estate issues and try to figure out the trading yourself, and I wouldn't confuse the two issues. BTW, I agree ARCP is a buy right now, but there is a lot of risk. If Brad is correct and they have .90-1.00 of AFFO then it is almost half the going rate of comparable REITs. We will see.
    Dec 8, 2014. 10:07 AM | 9 Likes Like |Link to Comment
  • Weak global comps for McDonald's across major segments [View news story]
    People just don't want mass produced food as much as they did in yesteryear. Dollars are moving toward fresher food--even if it simply perception. CMG and WFM are taking a slow toll on MCD customers. Even in the burger space, many are moving toward a fresher approach. I am sure McD will adapt, but it may take time.
    Dec 8, 2014. 09:53 AM | Likes Like |Link to Comment
  • American Airlines Group Reports November Traffic Results [View article]
    mark, I think they will beat the analyst numbers this qtr. of 10.3Bn and 1.54 pretty easily. I suspect this has more to do with the unusually early snow and cancelled flights, especially the bad weather around T'Giving.
    Dec 8, 2014. 09:31 AM | Likes Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    Stephen, what is the "typical average PE" of the S&P 500?
    Dec 6, 2014. 11:02 AM | Likes Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    Me too, on the value. I also appreciate the dialogue! What ideas do you have that are more undervalued than AAL? I'm having a tough time getting my cash level down because I can't find bargains. Oil companies are cheap, but they may get a lot cheaper. TIA.
    Dec 5, 2014. 11:13 AM | Likes Like |Link to Comment
  • Good Times Restaurants Trades At A High Valuation [View article]
    TPV, It is also possible that the 2.09MM shares were holding the stock down over the last three months as they were sold off! It was filed about three months ago with an expected max price of less than $5. They release earnings next week, and the huge spike in volume and price could be an early indication of a very strong report. A couple of points for your readers: remember, they are adding both GT and Bad Daddy's restaurants. I believe about 8% growth on GT and 3 new Bad Daddy's (from zero) in CY 14. Adding in the SSS produces very solid growth. They have also announced aggressive plans for next year, as well as possibly working deals with third party franchisees. Any announcement could cause a huge spike. Finally, assuming GT is at the start of a high growth surge, we might look at some other valuation standards. Using Price to Sales, GTIM could run a long way to catch up to other popular/growth restaurant stocks. All that being said, it could certainly pause as you suggest.
    Dec 5, 2014. 07:00 AM | 1 Like Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    Mitch, that should be a nice divvy if it doesn't get called away. The next big catalyst is likely to be the earnings report just before they expire (assuming nothing bad). If oil stays down, it will be a shocker, but 60 is a big move from here in two months. I might prefer selling Jan for that reason.
    Dec 4, 2014. 09:44 PM | Likes Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    >>Remember these are very very good times for airlines (low oil price, strong economy).<<

    Maybe you are overthinking this, abdullah. Generally we want to get into companies that are doing well. You are working under the assumption (which may or not be true) that things will soon be bad for the airlines. The problem I have is that the price and estimates don't reflect either the low oil prices or the strong economy. If oil stays in the mid 60s, I think AAL will make over $10 a share next year. The NOLs will be there for at least a year or two. That is quite a windfall, and they can do a lot for their balance sheet. It is possible that oil will run back up to $100 and the economy will slow way down, but it is also very possible that the economy will continue in its current lumbering growth phase, and oil will stay here or go down a little. The airlines should do very well. That is contrarian thinking, I admit.
    Dec 4, 2014. 08:45 PM | Likes Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    abdullah, If we put your 8X valuation on the S&P 500 right now the index would be in the 800s! That is just a little above the 2009 lows. Not realistic. 8X just doesn't work over the long haul. I had this argument with people who felt Apple should be valued at 8 times earnings when it was in the low 400s. It is a tech company, and, like airlines, many people feel they deserve an extra discount. Here is the problem: if mgmt is paying attention, they can buy so much of the company back that it can't stay there for long. On the NOLs--going from memory, but I think they have a little under 10Bn available. That is significant. On the EPS estimate, it was close to $7 back when oil was at $95/brl. Oil is obviously the big variable, but if we stay below $70, they will likely make a good bit more than $8.50/sh. On the valuation, the DJ Trannys are carrying right at a 20 PE today, like the S&P 500. There just aren't many huge bargains like AAL out there. All of those companies have risks, too. I agree that airlines should carry a discount, but a 60% discount is overboard imo. I think 35%, or a PE of ~13 is more reasonable, although airlines have a lot of structural differences when comparing to their past. But, assuming AAL makes $9 next year, and we disregard the NOLs completely we are still looking at ~$75-$80 with the discounted 13 PE. I believe the airline landscape has changed, and the sheer size and gate limitations will make the cut-throat competition of the past less likely in the future. Airlines have adjusted their business model and they are making a lot of money with lower fares.
    Dec 4, 2014. 07:17 PM | 1 Like Like |Link to Comment
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