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Cheap Wings

Stock (Symbol) Stock Price

Buffalo Wild Wings (BWLD)

$63

Data is as of Expected to Report Sector

May 19, 2011

July 25

Retail & Travel

Sharek’s Take
David SharekBuffalo Wild Wings is getting great prices on chicken wings. Wings were more than $1.50lb and last quarter the price dipped below $1lb. That helped BWLD pump out 45% profit growth last quarter. Wings should stay cheap the rest of 2011.

The NFL lockout could hurt results. NFL fans clock to Buffalo Wild Wings to watch games, drink beer and eat food. Not it seems we could miss the first month of the NFL schedue as the NFL negotiates a new labor contract with NFL players.

One-Year Chart
BWLD has been pushing higher. The one-year chart looks great, but the P/E of 24 is close to my Fair Value P/E of 25. I’m torn between saying BWLD is selling where it should, or the stock will keep climbing because wings are cheap. Note estimates show teens growth the next two quarters. The company should beat the street but by how much?
Earnings Table
Profits grew a whopping 45% on cheap wings and revenue slightly above estimates (up 20%).

BWLD crushed estimates by 9 cents and that should keep the stock timely. Annual Profit Estimates increased by around 15 cents a year. This is also a very good sign of prosperity. Quarterly estimates are what they usually are with this stock. BWLD is a 20-25% grower. Remember the company could miss estimates two quarters from now if the NFL games don’t occur.

Fair Value
I wish I could tkae the Fair Value P/E from 25 to 30. I’m not going to do that though. Wing prices could rise next year and that would make comparisons tough. Cheap wings isn’t a long-term trend.
Ten-Year Chart
Buffalo Wild WIngs is one of my favorite stocks to buy-and-hold. Look at how pretty the ten-year chart is. So nice. Profit growth has been 24% in each of the past three years and looks to be 26% this year.
Power Ranking Bottom Line
Growth Portfolio

13 of 20

Buffalo Wild Wings is clicking on all cylanders right now. That should continue through 2011. But if there’s a month of NFL games canceled, that would smack profits and sales. This stock also has P/E of 24, putting

BWLD is ranked 13th in the 20 stock Growth Portfolio Power Rankings. This stock is not in the Aggressive Growth Portfolio.

Aggressive Growth Portfolio

N/A

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