The Steak n Shake Company (SNS)

Lots of insider buying.

Young CEO with good turn around record.

Get in under $12.25 - grab on and enjoy the ride-eh!!

Building a portfolio of stocks with clusters of insider buys.

Sitting just under its 52 week high. Solid year but the price is not cheap anymore.

Strong insider buying.

I pitched Steak n Shake down July 8th, and they're up a few dollars since then. I see little going on in their favor since I commented that: "Sneak n Shake released thier earnings in true chopped steak fashion; a bite or two at a time...hideing) the reality that the temporary improvement in business is not only not necessarily sustainable, but actually demonstrates that a lot of "potential" is already deep fried in. The most recent release touted the same store sales increase of nearly 5%. Traffic was up 13%. (What were the other 8% doing?). .... they also noted that: "Management does not believe same-store sales constitute the main, exclusive, or most important metric to measure results."

With 5 to 1 Debt (footnoted last post that debt is clear and apparent on their statements), to cash, low margins, (negative last quarter), the chance that commondity prices will rise, minimizing capex (expansion), and that more of the "traffic" is just looking for a warm seat, (or bathroom as kristm noted), leads me to believe that the price shaking going on is a little bit overcooked, at least for the next year or so."

SINCE then, they have announced that they are merging with Western Sizzlin Corp, a chain that has been grazzing along for years with no appreciation. (Wilted salad bar and cattle prodding ordering and service).

Two Wrongs don't make a 'right' in the any business, especially the restaurant business. Mergers sometimes mean that duplications can be pulled, lowering overhead, but in this partnership, I think the steak is still a little raw.

While I believe thier business outlook has improved the last year, I'm still not biting the current valuation set by Mr. Market.

Insider buys.

New CEO really turning things around...good stock to watch.

On a recent visit there my wife and had a burgers and fries. The food quality and portions were in line with the stores of similar types. The wait staff were well trained and very pleasant. The menu prices were excellent.

Restructuring/turnaround play

it is my holding but i forgot to include it in picks.
:-)

testing top 12 1yr gainers

I don't know about you but I love steak.

Sardar knows capital allocation. It isn't about burgers and shakes- it is about free cash flow. Beats S&P next 3 years, then gets taken private.

Undervalued and plenty of room to grow all over USA.

New ceo is a sharp guy who worships Buffet and his Jedi investment tricks. Bonus that the conference calls are actually intelligent and he knows what needs to be done which is fairly amazing to see. Only worry for me is the economy but think they'll be able to weather the storm. Plus it's trading at around half of book value. So if he can just keep the place from going to hell, should turn out pretty well. I'm going to buy in my real-money portfolio if it gets into the 5s again.. annnnndd, let's not forget their milk shakes bring all the boys to the yard. especially the oreo, cookies n cream one -- that thing is just downright dangerous.

tracking my portfolio

I see a lot of problems in the financials for this one, hard to know where to begin!

1) cash flow going south, quick ratio/current ratio way too low, free cash flow margin is negative, owners earnings a whopping negative.

2) return on assets, invested capital, equity diving negative

3) margins are aweful.

Also, not debt free, so that is a huge concern with the margin situation. I also think the trend is going to be towards healthier food among the people who are willing to pay more for fast food (compare to Chipoltle Grill for example).

I say steer clear of Steak n Shake.

Looking to new managment to turn the company around.

Tasting is believing - SNS offers good stuff cheap and the new CEO is the one to shake this company up and warm up their chili stock price. I'll bet a double steakburger this company is significantly higher in 18 months.