BWLD

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Earnings from 8 Interesting Ideas

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By Brian Nelson, CFA “’I believe you have to be willing to be misunderstood if you’re going to innovate.’ You can’t outperform the market if you are the market. Similarly, you must adopt a non-consensus view and be right about that view to beat competitors.” CEO of Amazon Jeff Bezos with ‘Source: 25iq’ commentary Many members have expressed to me that they just can’t believe investors select stocks in a different way than the Valuentum style (absent dividend growth investors, which have carved out a unique niche in their own right). Some of our new members think the Valuentum process is the principal and dominant framework for investing – or how the majority of investors look at things. This view … Read more

Restaurant Industry Update

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The fast-food (quick-service) breakfast wars have intensified. It has become a high-stakes game for all participants, and most have gone all-in to capture market share, to use poker parlance. The NPD Group, a leading global information firm, noted that the pace of expansion for fast-food breakfast across the restaurant industry has been a key bright spot, and executives across the industry are taking note: Quick service, which accounts for about 80 percent of total restaurant morning meals, showed the strongest increase in breakfast visits of all restaurant segments with a 4 percent increase in the year ending December 2013 period compared to year ago, reports NPD CREST, which every day tracks how consumers use restaurants and other foodservice outlets. Morning … Read more

Our Notes from Buffalo Wild Wings’ 2014 Analyst Day

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Notes Buffalo Wild Wings (BWLD) has been a great growth story. (1) Substantial unit growth opportunities remain across the US and Canada. The company’s vision is to be a growth enterprise of restaurant brands, with more than 3,000 restaurants worldwide. The firm’s growth strategy includes creating the ultimate guest experience in the US and Canada, growing Buffalo Wild Wings into an international, globally-connected brand, and building an enduring, diversified portfolio of brands, including PizzaRev. (2) Challenges: slow economic growth projections, consumer demands for more robust flavors and authenticity, and governmental pressures (minimum wages, tipped wages, and healthcare). (3) 2014 financial outlook: 2014 net earnings growth of 20%; relatively flat commodity costs (excluding traditional chicken wings); labor deleveraging, strong net earnings … Read more

Looking for Alpha? It’s In Our Best Ideas Newsletter

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Best Ideas portfolio holdings Buffalo Wild Wings (BWLD) and Baidu (BIDU) reported fantastic third-quarter results after the close yesterday, sending both of their shares higher in Wednesday trading! Buffalo Wild Wings closed at $141.22 per share, up over 9% on the trading session, while Baidu closed at $164.93 per share, up nearly 3.5% for the day. Baidu was added to our Best Ideas portfolio August 1, 2013 at $133.60 per share (click here for Best Ideas portfolio transaction log). If you didn’t receive that email, contact us immediately at info@valuentum.com. A 23% gain in just a couple months isn’t too bad, and we’re expecting further upside to shares. Buffalo Wild Wings has been a holding in our Best Ideas portfolio … Read more

Buffalo Wild Wings’ Second Quarter Was Fantastic

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Best Ideas Newsletter portfolio holding Buffalo Wild Wings (click ticker for report: ) announced solid second quarter results Tuesday afternoon. Revenue jumped 28% year-over-year to $305 million, a touch better than consensus estimates. Earnings per share surged 42% year-over-year to $0.88, far better than consensus expectations. Free cash flow year-to-date totals $13 million, equal to just 2% of total revenue. Free cash flow is temporarily depressed as the firm continues to expand its domestic and global footprints. Eleven franchise-owned restaurants were opened during the quarter, as well as 10 owned by Buffalo Wild Wings. Same-store sales during the quarter grew 3.8% year-over-year at company-owned restaurants and 4.1% year-over-year at franchise-owned restaurant. Relative to most of the restaurant space, these numbers … Read more

Gross Margins Weigh on Buffalo Wild Wings

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Best Ideas Newsletter holding Buffalo Wild Wings (click ticker for report: ) reported a mixed bag for its first quarter as high wing costs weighed on profitability. Revenue managed to grow 22% year-over-year to $304 million, exceeding consensus expectations. Earnings per share were disappointing, falling 11% year-over-year to $0.87. Free cash flow turned negative after it was in the positive $20 million range in the same period a year ago. In spite of industry-wide negative sales trends, Buffalo Wild Wings was able to muster positive same-store sales growth of 2.2% at franchised owned restaurants 1.4% at company owned locations. This occurred after the firm was impacted by one less week of NFL play and after the company kicked off the … Read more

Buffalo Wild Wings Over $90

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Shares of Best Ideas Newsletter holding Buffalo Wild Wings (click ticker for report: ) are trading back over $90 again today. We recently increased our fair value estimate to $92 per share, and we anticipate additional upside as the market becomes privy to the firm’s wonderful growth trajectory.

Best Idea Buffalo Wild Wings Making 2013 Highs

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Although the company had its fourth quarter earnings squeezed due to higher chicken wing prices, Best Ideas Newsletter holding Buffalo Wild Wings (click ticker for report: ) is approaching new highs for 2013, trading north of $85 per share. Hedge fund Citadel recently upped its stake in the company to 5.15%, and we think the firm has a strong quarter ahead with March Madness, the NHL playoffs, and the NBA playoffs all quickly approaching. We think shares have some additional upside from current levels, so we’re holding steady in the portfolio of our Best Ideas Newsletter.