Rubio's Restaurants, Inc. (RUBO)

PROS:

a) I love this place. I make a point of eating here every time I'm near one.

b) It's affordable, kid-friendly, fast, and healthy. Name me one other publically-traded chain you can think of that meets all of these criteria. (Can't think of any? Neither can I.)

c) People are becoming really unwilling to poison their kids with McD's, and there are billions spent by the Federal government - CDC, NIH - on public awareness campaigns to encourage healthier eating for kids. Those billions help RUBO and hurt the bigger chains.

d) No debt. That's right, no debt on the sheet.

e) Founder CEO Ralph Rubio. I like a man who puts his name on the Nasdaq ticker. That takes guts.

CONS:

a) 158 restaurants - margins are razor thin (<2% operating margin) and falling over TTM. Comps are flat. That's not great but their new branding/look scheme is outperforming the corporate average by 18% and it shouldn't take too much capex to institute that in all the restaurants.

b) Earnings are barely break-even at this point; numbers such as margins, comps and earnings are pretty volatile. To their credit, management isn't cooking the books to make these look better. I think it's way too early in the history of this company to make any judgements on these early numbers.

c) Zack's criticizes them for expanding aggressively while the economy is slowing. I dunno about that - I can fill up here for $8 and the food's great. I think people who have to feed kids, pretty much have to feed kids. They'll probably do it here.

Right now the market cap is right above the $100m limit. That means that, for the purposes of CAPS, there will never be a better time to green-thumb this company; if the numbers change to suggest a better buying opportunity, CAPS won't let me have it. So I'm putting the green thumb on these fish tacos right now!