Simple Screen: Discounted Real Estate, Share Buybacks, Debt Reduction, Transformation, Oversold

 JACK: Jack In The Box

Jack in the Box was founded in 1951 and operates and franchises fast food restaurants, Jack in the Box and Del Taco, throughout the U.S. The company is based in San Diego, California.

Jack in the Box is transforming from an asset-heavy and barely growing to a faster-growing, asset-light franchisor that is shareholder-friendly by monetizing real estate assets, dividends and improving its capital structure with share repurchases.

In addition to 189 restaurant-owned land locations, JACK owns its corporate headquarters in San Diego, California. The headquarters is 70,000 square feet and contains approximately four acres of undeveloped land. Its fair market value is around 40 million. Rent is earned at the land locations owned by JACK and used by the franchisee. 

IMO, at these prices, Jack in the Box stock is a weak intermediate-term buy and a stronger long-term buy. There's a high debt load, no obvious valuation discount to peers, and rising inflation for food and labor. Demand for fast food is weak, and the market is highly competitive.

Management is committed to maximizing shareholder value. Using the CF statement, over the past five quarters, debt payment was 91.73M, 45.60M was distributed as dividends, and 60.43M was spent on share repurchases.

Long JACK on 07/11/24

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