| Stock (Symbol) | Stock Price | |
Buffalo Wild Wings (BWLD) |
$144 |
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| Data is as of | Expected to Report | Sector |
Aug 13, 2014 |
Oct 27 – Oct 31 |
Retail & Travel |
| Sharek’s Take | ||
 Buffalo Wild Wings (BWLD) is entering a period of slower profit growth. Profits have soared an average of 51% the last 4 qtrs, and I think the company will grow at half that rate the next 4 qtrs. BWLD is still clicking along, as business is robust — same store sales rose 8% last qtr. The company is also buying tablets for its tables and this technological advance for the restaurant industry will speed order times and allow customers to order “one more round” even if the server isn’t around. The P/E of 28 is a little high for BWLD now that its returning to “normal” growth, but with the company executing so well (and wing prices are low) this is a tough stock to sell, but I do recommend investors lighten their position as upside its limited. |
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| One-Year Chart | ||
 BWLD took a hit after it reported earnings last qtr. I think that was hot-money hedge fund managers who stick with companies that have high profit growth, then sell them when growth slows. Note the Estimates show 13% and 12% growth ahead. BWLD’s Est. LTG of 20% may be low, this company usually grows 25% a year. |
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| Earnings Table | ||
 BWLD grew profits 42% last qtr, helped by the World Cup (which won’t be happening next year). Sales increased 20%. Again, sales increased 20%. So I think all we can really expected in a normal environment is 25% profit growth.BWLD beat the street by 6 cents, and these estimates had increased each of the last 3 qtrs. Annual Profit Estimates “kept bulging” last qtr. This qtr they are rather flat. Profit growth is expected to average just 13% the next 4 qtrs. Analysts feel management is low-balling these numbers. |
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| Fair Value | ||
 Unfortunately, this stock may not do anything for a couple of years. Note this stock usually gets a P/E of around 23. So with estimates of teens profit growth, 23x profits is more than fair. |
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| Ten-Year Chart | ||
 The reason I am reluctant to sell this stock is if I do it will likely go higher and leave me behind (as other stocks have). It’s nice to just sit on a stock and compound at 20% a year, no? |
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| Power Ranking | Bottom Line | |
Growth Portfolio
24 of 25 |
Buffalo Wild Wings is executing very well but there’s slowing profit growth ahead and that will likely keep the stock in check. BWLD is currently overvalued, but I am reluctant to sell because it’s such a solid long-term winner. BWLD is ranked 24th in the 25 stock Growth Portfolio Power Rankings, and its on my short list of stocks to sell if I find one better. This stock isn’t in the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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