3/20/2011

4 Restaurant Stocks to think about in this value stretched market

ARKR: Ark Restaurants Corp, 6.90% dividend yield, EV to FCF near historical lows trading at 6 , 27% YOY revenue increase with a FCF/Sales yield of 4.06%, insider ownership of 48.71%, 49 million market size


FRS: Frisch's Restaurants, 2.90% dividend yield, large real estate portfolio, EV/FCF = 6.45, 4.1% YOY revenue increase, insider ownership of 25.91%, 106 million market size

Please click to see additional data and the other 2 ideas

2 comments:

jacob said...

What do you think of management of ARK, I saw that the CEO gave his ex wife a large loan of company money. The General Counsel at the time agreed that it was legal! Do you trust the management of the company?

ShadowStock said...

Hi Jacob

Yes I trust management.

The numbers speak volumes for a shareholder friendly management team. ARKR was posting +20% pretax ROIC in 2008, 2007 and still far outpace other restaurant stocks.

Management is not complacent and will quickly close an establishment or ask the landlord for concessions if the location is not generating positive store level operating cash flows.

CEO Mike Weinstein was an investment banker before creating the publicly traded Ark Restaurants. He clearly understands capital allocation and ROIC. Joel Greenblatt was a large shareholder but sold out December 2010.

http://seekingalpha.com/article/116472-ark-restaurants-corp-an-enviable-economic-moat?source=qp_article

Food prices and the economy will make things tough.

Long ARKR

Good Luck
John