Biglari Holdings: No Steak, Shake or Sizzle

| About: Biglari Holdings (BH)

Biglari Holdings (NYSE:BH) is getting smoked once again today. This restaurant chain / wannabe roll-up conglomerate reported very disappointing results on Friday after the market close. BH earned $3.84 versus $1.58 last year and the sole covering analysts’ expectations of $5.97. I have warned that this company is a disaster in the making and have short positions on. The stock has lost just over 1/3 of its value since peaking in early April at $418.

BH was a short pick for my newsletter, The LakeView Restaurant & Food Chain Report several weeks ago. Is it too late to short BH? I believe that this stock could trade into the 100s, especially if the chairman makes another nonsensical offer for stock of another company. The company should earn between $15 and $16 dollars in FY10. What kind of multiple would you want to put on this stock? Does it deserve a multiple like McDonald’s (NYSE:MCD) or Yum Brands (NYSE:YUM)? I think not. BH deserves a multiple of 10 to 12, and I am being generous.

Disclosure: At the time of this entry Scott Rothbort, his family and or clients of LakeView Asset Management, LLC was long shares of MCD and short shares of BH--- although positions can change at any time.

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Tagged: , , , Restaurants, Earnings
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