Ark Restaurants Corp. (ARKR)
The Company and its subsidiaries own and operate 23 restaurants and bars, 25 fast food concepts, catering operations and wholesale and retail bakeries.
Recs
Revenues down, profits cut in half. What's to like? It's gonna go down!
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Americans eat too much, the restaurant business have to invest in steel tubular reinforced chairs, toilets made of steel as porcelain cannot support the weight of the average american, reinforced floors, extra large bowls, huge cups, portions of double fried beans, mashed potatoes with extra grease,
these costs will cut into the profit of any restaurant
Recs
This company is a strong operator with a solid balance sheet and a high dividend yield. Having their restaurants in the casinos give them a steady stream of customers that should see them through economic downturns since people seem to keep gambling..even through recessions.
Current Ratio: 2.25
Price/Sales 0.89
ROA: 16.57%
ROE: 21.59%
Only real knock on this stock is its low trading volume.
Recs
What's not to love hear.
Low P/E, high growth, low debt. Cash on the balance sheet.
I recommend you buy this as often as you can afford it and green thumb this as often as it's ratable.
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Restaurants are a tough business, but they seem to understand what needs to be done to turn a profit. And im a sucker for a nice dividend, especially on such a small cap. It seems to have high insider share holdings as well.
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The new Gem in my closet, a gorgeous website. Relatively no debt for the cost that it takes to open a restaurant. A nice little chunk of cash on hand. Strong growth, and I've eaten at both in Union Station, in DC and it was pretty good. So I say buy this baby, it'll be the next one listed on the advertisement for Hidden Gems. Ok maybe not but I can dream right?
Recs
I like the restaurants. They're geared towards people with a lot of discretionary income. Hard to grow that model - a lot of different things have to be in place, it's not cookie-cutter the way a McDonald's is - but it's less susceptible to the downside of the business cycle.
P/E is 19; hard to pin down the PEG because the operation is still small enough that the graph is lumpy. (Peter Lynch says it's a buy at 20!) They did away with all their debt 3 years ago; right now the forward dividend yield is about 5%, which is attractive just on its own. But I think long term growth, the model, and the flawless execution is the story here - I'm bullish!
(OK, they closed Ernie's, so maybe 'flawless' is an exaggeration. Apparently the numbers weren't good. At least they had the sense to get out of La Rambla and turn a profit on it; and they offloaded the Jack Rose too, a restaurant I always liked but which was stuck 20 blocks from anywhere it could have thrived.)
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"Dividend Winner"
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dividend is nice - restaurants while cheezy are in mature (yet very competitive markets) with ability to garner high prices. some of the brands/concepts are scalable and they've already shown this with gallaghers. i think if they are smart with their store expansions, there could be decent upside even at these levels.
Recs
Ark restaurants own and operate around two dozen restaurants cum bars and around same number of fast food concepts. Along with these the company also has catering operations and wholesale and retail bakeries. These restaurants are mainly located in New York, Las Vegas and Washington D. C. among these the Las Vegas contributes towards approximately 50% of the total revenue.
Ark restaurants has gradually become a debt free company by diverting its steady cash flows in 2002 and 2003 towards repaying its debt and now it is concentrating on building the shareholders value by diverting the cash flow towards the investors in the form of dividends. In line with this approach the company’s Board of Directors has recently declared a special dividend of $3.00 per share in addition to its regular quarterly dividend of $0.35 per share on the Company's common stock.
Moreover the company has shown a strong performance in the first quarter of 2007 as its revenue grew by around 3% as compared to the first quarter of 2006. The same store sales grew by double digits at many of its locations which is a indication of its growing guest count as the menu prices were steady.
Additionally with the per capita disposable income of Americans growing they are expected to spend a higher portion of their food dollar eating outside home giving a attractive platform for the restaurant business in the future. Taking all these factors into account Ark Restaurants seem to be in a good position with a great upside potential.
Recs
classy restaurants in great locations paying terrific dividend with room for growth

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