Stock (Symbol) |
Buffalo Wild Wings (BWLD) |
Stock Price |
$152 |
Sector |
| Retail & Travel |
Data is as of |
| November 9, 2015 |
Expected to Report |
| Feb 3 – Feb 8 |
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 |
 Higher chicken wing prices and buying 41 franchise locations have hurt Buffalo Wild Wings (BWLD), and this is my opportunity to get back in this fabulous restaurant. I originally purchased BWLD on 2/9/06 at $19 and sold on 12/3/14 when I felt the stock was going to be pressured in 2015 as wing prices were set to rise (this happened). Still, this great franchise has left me thinking I made a mistake in selling. Luckily, BWLD missed earnings estimates by 30 cents last qtr and now is expected to grow profits just 4% this year. The company anticipates returning to 20% profit growth in 2016. The stock closed at $155 last Friday and this could be the bottom as company management just authorized a $200 million stock buyback program. My Fair Value for 2016 is $175 and 2017 is $212, which is 27x earnings. I will purchase BWLD today in the Growth Portfolio and Aggressive Growth Portfolio. |
One Year Chart |
 Wow the stock held in there even though profits were poor the past 4 qtrs. It even got past $200. The nice thing about the poor growth is next year’s comparisons are easy. Note 40% profit growth is expected next qtr.
BWLD has missed estimates for 4 consecutive qtrs, and that’s gone from missing by 2 cents 4QtrsAgo to missing by 30 cents LastQtr. Annual Profit Estimates have also fallen, 2016’s from $7.20 to $6.48 in 4 qtrs. Still, profits have grown each year in BWLD’s history and I feel the company will make it through the rain. |
Fair Value |
 Buffalo Wild Wings was getting a 30 P/E the past few years, but I felt the company was worth 27x earnings. Now with the stock around $155 the P/E is 24x next year’s earnings. Time to buy back in. |
Bottom Line |
 Buffalo Wild Wings has always been one of my favorites, as I’m from Buffalo, NY. The stock has treated me well too. BWLD has compounded at a 27% rate the past ten years.
I am lucky to be able to pick up Buffalo Wild Wings on a “dip” in price. This is a buy-and-hold franchise which has the ability to grow 20% a year. BWLD will rank 13th of 33 stocks in the Growth Portfolio Power Rankings and 11th of 14 stocks in the Aggressive Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
13 of 33Aggressive Growth Portfolio 11 of 14Conservative Stock Portfolio N/A |
