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$4.19 -0.32 (-7.10%)
10/10/2008 4:00 PM

Famous Dave's of America, Inc. (DAVE)

CAPS Rating:
*****

The Company develops, owns, operates and franchise restaurants.

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1

Avatar NightBengal (22.40) Submitted: 4/03/08 11:47 AM : Outperform Start Price: $10.60 DAVE Score: -25.34

I can personally say this is a fantastic restaurant with a good environment and staff that is interested in the customer. Add to that stock price cut in half over six months, less than 25% off its 52-wk low, and earnings growth estimated at 23% (PEG well below 1), and this looks like a winner right now.


Regarding the top bear pitch, i.e. the only one, as of this writing: The operating costs were a hard hit, and that isn't fixed overnight. It won't go unaddressed, especially with a new CEO. With 50% gross margin, which is well ahead of the industry, they have some wiggle room on this until a cost reduction plan is in place.

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Avatar madcowmonkey (97.20) Submitted: 4/17/08 1:38 PM

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I shorted this in short fashion, but I still feel the same about it from what was written in my post.
Sounds good, but "cost reduction plan" is another way of saying "charge the customer more." Best of luck with your value play.

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