Biglari Holdings (BH) is holding their annual meeting on April 27th this year, at the St Regis in downtown New York City. CEO Sardar Biglari conducts the meeting in a similar way as Warren Buffett has always done with Berkshire Hathaway (BRK.B), spending five to six hours answering any questions shareholders may have about the business. This will be the 3rd meeting in a row I'm able to attend, and I look forward to once again picking Biglari's brain to better understand the business and its future prospects.
My admiration for Biglari's investing acumen is no secret to anyone that's read any of my previous work. As I highlighted in my last piece earlier this year, Biglari has an impressive long term record of generating market beating returns for investors. His main investment vehicles have averaged a 17% annual return over the last 17 years, compared to just 4.5% annually for the S&P 500.
Critics will quickly point out that Biglari has under-performed the market in more recent times, which is also true. Since the end of 2010, BH's performance has significantly lagged the market. However, its important to note that BH is currently significantly undervalued, while the market is richly priced by any measure.
|2000-2016 (entire 17 year Biglari career)||17.0%||4.5%|
|2010-2016 (last 7 years)||7.8%||12.8%|
My questions for Biglari
As projected, Maxim was able to eek out a profit during the fourth quarter, but it was meaningless to the company as a whole. Its great that the bleeding has ended, but at this point I'm very curious to learn more about how much time Biglari is focusing on Maxim, and how quickly he expects to be able to ramp up revenue and profits there.
I'm curious as to why we haven't seen any new investments made recently, particularly why more Biglari Holdings shares haven't been purchased now that the stock is back in the $420 range.
Steak N Shake Franchising Updates:
SNS launched around 30 new franchised stores in 2016, a nice improvement over previous years. I'm curious about if we can expect to see continued growth in the annual totals.
The insurer has been a great acquisition, but I'm concerned about longer term headwinds in the space due to self-driving trucks. I'm extremely curious to hear Biglari's and Ed Campbell's (if thats even possible) thoughts on what this business might look like in 10 years.
I'm looking forward to getting additional questions from readers, which I will try to ask myself if they aren't asked by others at the meeting. I know that some investors/readers have a very different opinion about Mr. Biglari than I do. As such, let me clarify that I am happy to ask probing questions, but I will not be involved in asking any snarkey or downright rude questions. You'll have to go yourself if you want to make one of those.
Getting Together Before the Meeting
I will be arriving in NYC on Wednesday evening and have plans to meet with other investors for dinner. Fellow contributor Wolf Martin and one investor are already confirmed. I'm also happy to set up a pre-meeting lunch for those arriving too late for dinner Wednesday. Everyone is invited, so if you are interested, simply reach out to me via PM for more info.
Annual Meeting Notes
I plan to put together my notes after the annual meeting and share them here as I started to last year. Given my lack of time to publish everything in the past, I'm considering trying a different format this year by putting them in audio form, likely in a sort of question and answer session with with my brother moderating. I'd love to hear any feedback on how interested you guys would be in this method?
Disclosure: I am/we are long BH.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.