Stock (Symbol) |
Buffalo Wild Wings (BWLD) |
Stock Price |
$161 |
Sector |
| Retail & Travel |
Data is as of |
| March 14, 2016 |
Expected to Report |
| Apr 26 – May 2 |
Company Description |
 Buffalo Wild Wings, Inc., is an owner, operator, and franchiser of restaurants. The Company features a variety of menu items, including its Buffalo, New York-style chicken wings spun in any of its 16 types of sauces or five types of seasonings. The Company made-to-order menu also includes items ranging from Sweet BBQ to Blazin. The Company’s restaurants offer 20 to 30 domestic and imported beers on tap, including craft brews, and a selection of bottled beers, wines, and liquor. As of December 30, 2012, it owned or franchised 891 Buffalo Wild Wings restaurants in North America, of which 381 were Company-owned and 510 were franchised. Effective March 19, 2013, it acquired Pie Square Holdings LLC. During the year ended December 30, 2012, the Company acquired 18 Buffalo Wild Wings franchised restaurants. Source: Thomson Financial |
Sharek’s Take |
 Restaurant stocks are doing well these days. Lower oil prices are giving American consumers more money in their pockets, and a lot of it is being spent at restaurants. BWLD had flat profit growth in 2015 due to high wing prices, but the stock came down and gave investors a chance to get in at a good price. In 2016 BWLD is expected to have 24% growth, which would be solid. Management also has a $200 million stock buyback program to help profit growth. But not all is good in this report. The company has missed profit estimates by at least a dime the last 4 qtrs, and same store sales (SSS) rose just 2% last qtr. The misses and low SSS have caused 2016 profit estimates to fall from $7.08 to $6.48 and $6.15 the past 3 qtrs. I have owned BWLD for much of its public history, a history that has had profits up each year. I consider this a 20% to 25% grower, but one that has highs and lows. At $161, 26x earnings, the stock is fairly valued here, but my 2017 Fair Value is $199 and gives good upside potential for a stock in a sector that’s timely. |
One Year Chart |
 BWLD clocked in with 23% profit growth last qtr on a 20% rise in sales. SSS disappointed, and that could speak about demand (some feel things will pick up in Spring). Estimates for the next 4 qtrs are as follows: 19%, 26%, 33% and 21% but these just declined by 2 to 6 cents. I love the Est LTG of 20% — always have — as well as the fact profits have been up each year since BWLD went public. |
Fair Value |
 Technically, BWLD is fairly valued here so I was considering selling shares. But when you think about the stock maybe going from $160 to $200 and perhaps $240 in 2-3 years you reconsider things like that. In fact, if the company makes $7.50 next year and gets a P/E of 32 (as it had during 2014 & 2015) then the stock will be $240. |
Bottom Line |
 Buffalo Wild Wings has been a machine in growing profits 21% a year and its stock 23% a year the past decade. Restaurants are hot right now as American consumers spend. 24% profit growth is expected this year, but the company has been missing lately so we’ll see. BWLD also doesn’t have to deal with strong dollar issues. Overall, this is a solid buy-and-hold growth stock that can also be traded. BWLD rank 11th of 37 stocks in the Growth Portfolio Power Rankings and 14th of 16 stocks in the Aggressive Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
11 of 37Aggressive Growth Portfolio 14 of 16Conservative Stock Portfolio N/A |
