| Stock (Symbol) | Stock Price | |
Buffalo Wild Wings (BWLD) |
$138 |
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| Data is as of | Expected to Report | Sector |
February 27, 2014 |
Apr 28 – May 02 |
Retail & Travel |
| Sharek’s Take | ||
 Buffalo Wild Wings is a sports bar. The company makes money off food & drinks, especially chicken wings. What affects BWLD stock are two things: (1) Wing prices, which can swing profits from single-digits to +30%. Now wing prices are low, and the company is growing profits rapidly. (2) Same-store sales (SSS), which were +5% last quarter. Good sporting events help SSS, like a great NFL season (check) and once-in-a-while events like the Olympics (check) and the World Cup (check). With so many good sporting events this year, BWLD should profit handsomely. The problem is this stock is normally worth 25 times earnings, and now has a P/E of 29, so the stock is fairly valued on a long-term view. |
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| One-Year Chart | ||
 The run-up BWLD has had it due to low wing prices. Wing prices where high a couple of years ago, and I knew they were about to fall and profits would roll in, but I never imagined Wall St would push BWLD’s P/E to 29. The Est LTG is only 20% per year, a 29 P/E is rich. |
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| Earnings Table | ||
 Profit growth was 24% last quarter but sales increased only 12%, down from 28% the prior 2qtrs. This is OK, sales should increase 20% this qtr. BWLD beat by five cents. That’s good but not great. I like that quarterly estimates increased. Annual Profit Estimates continue to trend higher. This stat will keep BWLD a timely stock. Quarterly growth looks good for the next two quarters and these numbers are increasing. The Olympics will help this qtrs numbers, the World Cup the following 2 qtrs. |
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| Fair Value | ||
 I’ve tracked BWLD since before the IPO. I used to carry around the prospectus, but in NYC space is limited so I dumped it. Look at how BWLD has grown profits around 25% a year yet the median P/E has averaged 26. I know BWLD stock as well as anyone, it’s normally worth 25 times earnings. Since 2014 is good, its worth a P/E of 30 and is now close to being fairly valued. |
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| Ten-Year Chart | ||
 This stock has recently jumped over its long-term trendline. It’s because of low wing prices. But soon we will be comparing low wing price quarters vs year-ago qtrs that also had low wing prices and the profit growth will come back down to the 20%-30% range. When that occurs I think the stock will be dead money for a year. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
23 of 27 |
Buffalo Wild Wings is clicking on all cylinders with the Olympics and World Cup fueling the growth. Next year, we will be comparing regular qtrs vs solid qtrs from 2014. So this stock is timely now, but long-term investors should sell half their position this year while growth is good. BWLD is ranked 23rd in the 27 stock Growth Portfolio Power Rankings. This stock isn’t in the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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