7/02/2010

07/02/10 Lubys COO and CEO each reported 27,998 shares purchased @ 3.84

LUB (Lubys) moved up 3.83% today in this dismal market reporting more negative private sector job data.


Positives:


Total debt reduction from 2005 compared to the TTM


28% owned by insiders


Only 53% of float held by institutions


Recent successful bidder for 61 million in the bankruptcy auction for Fuddruckers


Added 201 locations with Fuddruckers raising the store count to 297 from 96


138 new franchised owned Fuddruckers potential generating enough to amortize the additional debt to purchase Fuddruckers


Recent strong quarterly results posting profits of 3 cents on sales of 57.20 million all this before the block buster bankruptcy auction win for Fuddruckers


Large real estate holdings before Fuddruckers recorded on the book at a large discount to market value. 96 owned locations


Incorporated in 1959 and many of the properties were recorded on the books over 15 years ago.


Price to book of .70 improved from the 2006 value of 1.7
Price to sales of .40 versus .90 for 2006


Negatives:


Economy continues to worsen


Food costs rise


Unable to turnaround existing Lubys restaurants and Fuddruckers


The turnaround is far from certain and the price has been held  back until positive results are visible


I have a position in LUB

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