UncleLongHair

Will Steak n Shake Become the Next Mini Berkshire Hathaway?

At WEST, book value per share went from $8.48 in 2004 (the year before Biglari took over) to $6.36 at the end of 2008, a decline of 25% over 4 years. This included doubling his money with the FRN investment. Without that, losses would have been more than 50%.

WEST closed nearly 50% of its locations in the past 5 years, and its top and bottom lines have shrunk accordingly.

Biglari originally paid as much as $15-17 for SNS and at one point was down over 80% on this investment, and is now down around 25-30% from those buys.

Biglari is also showing a loss in his smaller positions such as JACK and ITEX.

Before Biglari can be called "the next Buffett", he needs to demonstrate that he can make money for his investors.

Unlike Buffett, Biglari does not pay bargain prices for his investments, and does not develop them to make them more valuable. He does pay himself a salary of nearly $1 million though -- nearly 10x Buffett, though he controls a company about 1/500th as large. Doesn't sound very Buffett-like to me.

A Reasonable Look at Steak N' Shake CEO's Raise

What do California IOU's have to do with overpaying a CEO?

Biglari now makes about 10x what his hero Buffett does -- and that is only considering one of his many jobs. Introduces quite a gap between "talk the talk" and "walk the walk".

Steak n Shake: Watching and Waiting as Biglari Names Himself CEO

Biglari was not that far on margin with the FRN investment -- there was some margin for a short while, but cash from insurance proceeds were on the way so he effectively only borrowed against that.

I do however agree with most of the rest of User 71887's post. Aside from performance at the Lion Fund, Biglari's single most positive action was the investment in FRN, and it isn't clear what portion of that was luck vs. skill. Aside from that, all he has provided is coining a lot of phrases from Buffett and talking about a strategic plan. Now he's got two large resturant companies without operational management, and probably has his hands full.

Changing Tides at Steak n Shake

The CEO of Biglari's other restaurant company, Western Sizzlin', also just departed. So how he's got two restaurant companies without a CEO. I hope he's got a plan.

Buying 'Em Back at Western Sizzlin'

What is WEST's intrinsic value, and why do you believe it is trading at a discount? The current share price is $12.85. Over the past two years, Biglari sold shares of WEST in rights offerings at split-adjusted prices of $14 and $17. Meanwhile, WEST's largest investment, SNS, which accounts for about 60% of WEST's book value, has declined by 50%. I think it's hard to make the case that WEST's intrinsic value has increased since the rights offering, in fact it has probably declined. Why would Biglari buy back shares that is issued only a year or two ago?