Monday, June 05, 2006

Buffalo Wild Wings (BWLD)

Buffalo Wild Wings (BWLD)

Check out this top % gainer on the NASDAQ and a while ago seen this one Buffalo Wild Wings (BWLD). This might be worth taking a little more look and research into this one. I do love the place myself!

Buffalo Wild Wings is a new hot in more ways then one restaurant, and they may be opening soon to a city near you. This is one the best restaurants that I keep seeing and popping up everywhere.

"...engages in the ownership, operation, and franchising of restaurants in the United States. The company’s restaurants serve various food items, as well as domestic and imported beers, wines, and liquor. As of December 25, 2005, it operated 122 company-owned restaurants and 248 franchised restaurants."

BWLD announced 1st quarter 2006 results. Your going to have to check out the total revenue, which increased 26.5% to $64.3 million for the quarter ended March 26, 2006, from $50.8 million in the same quarter last year. Also look at these sales growth for the quarter was 7.7% at company-owned stores and 6.7% at franchised restaurants. Net earnings grew 43% to $3.52 million from $2.45 million during the same period last year. Earnings per diluted share also grew 43% to $.40/share from $.28/share in the same quarter in 2005. These were very strong results imho.

Still not completely convinced okay. Well, check out the what says by taking a look at the "5-Yr Restated" financials on BWLD, we can see the steady revenue growth from $74.6 million in 2001 to $171.0 million in 2004 and $209.7 million in 2005.

Reported earnings start in 2004 with $.84/share, increasing to $1.02/share in 2005. There has been a slight increas in shares from 8 million outstanding in 2004 to 9 million in the trailing twelve months.

Free cash flow has been a bit erratic with $7 million in 2003, a negative $(2) million in 2004,and $3 milllion in 2005.

The balance sheet looks solid with $52.4 milllion in cash, enough to pay off the combined $20.2 million in current liabilities and the $16.1 million in long-term liabilities combined. Calculating the current ratio, with $8.7 million in other current assets added to the cash gives us $61.1 million in total current assets, which, when balanced against the $20.2 million in current liabilities yields a current ratio of 3.02. Recall that ratios of 1.5 or higher are considered "healthy".

Reviewing the Yahoo "Key Statistics" on Buffalo Wild Wings, we find that this is a small-cap stock with a market capitalization of only $336.86 million.

The trailing p/e is a moderate 34.61; however, the forward p/e (fye 25-Dec-07) is more reasonable 22.29. With the rapid growth estimated (5 yr expected), we have a PEG on this stock of 1.02.

Referring to the eresearch website, we can see that BWLD is in the "Restaurants" industrial group. By the Price/Sales ratio, BWLD is moderately priced with McDonald's (MCD) topping this list with a ratio of 2. This is followed by BWLD at 1.5, Applebee's (APPB) at 1.3, Darden (DRI) at 1, Brinker Intl (EAT) at 0.8, and OSI Restaurant Partners (OSI) at 0.8.

Comparing profitability numbers, by comparing the return on equity (ROE) figures, we find that BWLD is actually the least profitable with a ROE of 10.4%. Leading the list is Darden (DRI) at 26.2%, Applebee's (APPB) at 21.1%, Brinker (EAT) at 18.2%, McDonald's (MCD) at 16.9% and OSI Restaurant Partners (OSI) at 11.1%.

Finishing up the Yahoo statistics, we find that there are only 8.54 million shares outstanding with only 6.88 million of them that float. Of these shares, 1.32 million are out short, representing 17.90% of the float as of 4/10/06, or 11.1 trading days of volume (the short ratio). This is significant imho and may result in a 'squeeze' of the short-sellers if the company continues to report good news.

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