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Does anyone own this company? I have used my sell checksheet, the new technical information from Bob Adam, SSG, and annual report to evaluate. I think this company has moved from being a growth company to a possible value. Maybe they will pull out of this, maybe not. Current ratio has moved under 1 to 1. They have added on $71million debt (previously had no debt). I can't find in the annual report what they spent the money on. They bought back 54 franchises and also bought back stock. ROE and ROC have dropped. One of the founders (CFO) retired in Feb. 2016 in her mid 50s. Any input would be appreciated.
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I checked Value Line and did an SSG of BWLD to get a feel for the current situation for this company. I do not own any now but have considered purchases multiple times in the past. The price point was never good when I considered purchases. My quick analysis would have me not buying at this point. My SSG puts BWLD low in the HOLD zone. ROE may have gone down but it is still decent, for me, at about 15%. Sales look to still have a fairly stable growth rate. However, earnings have been quite volatile though in the past eight quarters or so. If I owned this company stock I would not be selling at the moment but I would be looking for a candidate to replace it. Long-term return at the average PE was below 2% for my SSG and only 7% at optimal high PE ratio at sale. These are low and I usually start looking for replacements with better return possibilities at such low numbers. Value Line did give a nod to buying after the downturn in the price for long-term investors. They did issue what I thought was a big caveat - that the company get past the current short-term issues. So I would lean to searching for a replacement for this company and do a comparison when I thought I found some candidates to replace BWLD. I would suggest you also go over why you bought BWLD in the first place. Do your reasons for buying still exist? If not, I would get busy in a search for a replacement. The big question is if this company still fits your needs and investment style? Those are questions I can't address. Good luck with the decision.
Russell Malley StockCentral Community Leader
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I would suggest taking a look at BJ's Restaurant (BJRI), Cheesecake Factory (CAKE) and Texas Roadhouse (TXRH) as challengers to Buffalo Wild Wings.
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