Not that I care too much about common financial metrics but You have to love a PE of nearly 38 on a pizza joint and a price to book of 34+. All I can say is that this is most likely going to collapse badly once those three rails break down.
In addition, while paying out 29% of its earnings as a crappy little sub 1 pct divvy, it is just sitting on a pile of debt. 10:1 debt to cash is where I think most companies cannot recover once the interest rates begin to rise. If this was going to be a long term business they should be using their cash to pay down debt but they are purposely keeping as little cash on the books as possible and they are paying out as much as they can as soon as they can.
Not that I'm accusing anyone of anything but if I were going to launder drug money this is about what it would look like. Rack up the debt so that if the cops take you down they really take the banks down and leave as little behind for them as possible in case they decide to prosecute.
Long time no comment and hope all is well with you Captain. Thanks for continuing to regularly post on your blog.
ReplyDeleteYeah, market continues to be really overinflated right now and many of these fast food/quick serve restaurant companies have crazy, early 2000's dot-bomb like valuations. Domino's Pizza (DPZ) isn't far off from Papa John's. The ultimate though has to be the recently IPO'ed Shake Shack (SHAK). I know you don't believe in the fundamentals, so I won't comment on that but I'd be interested in how the current chart reads on SHAK.
~J.T. Marlin
Just with a high level glance (not detailed wave count that takes time...), it seems like it could be a massive 4th wave HT. you had W3 terminate early may and then plunge to 62 as a of 4, 97=b of 4, 71=c of 4, 83 = d of 4 and now 73 is e of 4. If this is the case then expect another spike to perhaps 95 or 96 to form a DDT.
ReplyDeleteBy the way, you mentioned valuation metrics. Are you saying you don't think its worth a forward PE of 464? HA HA HA HA!!! This shows how useless these metrics are. How can this be any kind of reliable measure of share price value when a company with market cap of 2.68bn has such an astronomical PE?