Year-to-date, all is well at Texas Roadhouse, a casual restaurant loved by many and held by billionaires and insiders as of June 30, 2013. The company’s total revenue is up 10% year to date, income from operations is up 12 %, net income is up 18%, and diluted EPS is up 18%. Comparing the second quarter of 2013 to the same quarter in 2012, the numbers shift slightly: total revenue is up 10%, income from operations is down 5%, net income is down 2%, and diluted EPS is down 1%.
Measuring by the discounted cash flow model and the discounted earning model, Texas Roadhouse Inc. is considered an undervalued, predictable company, up 52% over 12 months.
Texas Roadhouse Inc. (TXRH) – Yield 1.76%
Predictability: 5 Stars
Founded in 1993, Texas Roadhouse is a casual dining restaurant that operates over 400 restaurants in 48 states and two foreign countries.
Up 52% over 12 months, Texas Roadhouse Inc. has a market cap of $1.82 billion, and trades at a P/E of 23.60 and a P/B of 3.20. The current share price is around $25.81. Under the discounted cash flow model the valuation is $7.00 with a -269% discount. The discounted earning valuation is $24 with a discount of -8%.
Last month Texas Roadhouse Inc.'s board of directors authorized a cash dividend of $0.12 per share of common stock to be distributed on September 27, 2013, according to a company press release.
Historical pricing, revenue, net income:
Texas Roadhouse Inc. reported results for the second quarter of 2013 including diluted earnings per share at $0.28. Comparable restaurant sales increased 4.5% at company restaurants and 5.3% at franchise restaurants. In the second quarter, seven company restaurants and one franchise restaurant were opened. The restaurant margin, as a percentage of restaurant sales, decreased 47 basis points to 18.6% primarily due to higher commodity costs. The company noted that the food cost inflation of 6.5% to 7.0%, had been updated from the previous expectation of 6.0% to 7.0%.
Texas Roadhouse CEO Kent Taylor commented on his company’s second quarter: “We are pleased with our top-line momentum, which resulted in another quarter of solid revenue growth led by positive comparable restaurant sales. Our new restaurants continue to generate solid returns, and we are still generating sufficient cash flows to not only fund our restaurant growth, but also enhance our existing assets and return capital to shareholders. We are confident that our relentless focus on legendary food and service is the best way to continue driving market share gains in this economic environment.”
Guru Action: As of June 30, 2013, three billionaires hold TXRH and insiders are trading.
The top Guru stakeholder is Jim Simons with 1.1% of shares outstanding, or 771,272 shares as of June 30, 2013, after he reduced his position by 36.76%. He sold 448,300 shares at an average price of $22.54 for a 13.1% gain. Over a five-year history, he has gained 47% on 1,697,272 shares bought at an average price of $17.55 per share. He gained 34% selling 926,000 shares at an average price of $19.23 per share.
NWQ Managers made a new buy of 333,502 shares and now holds 0.47% of shares outstanding. The firm bought at an average price of $22.84 for a gain of 13.1%.
Long-time stakeholder Steven Cohen upped his sake by 8.53% in the second quarter, buying 56,457 shares at an average price of $22.84 per share for a 13.1% gain. Over a five-year history, Cohen has gained 64% on 1,862,642 shares bought at an average price of $15.76 per share. He gained 50% selling 1,144,558 shares at an average price of $17.21 per share.
Steven Cohen’s trading history shows remarkable gains and a single losing quarter:
Joel Greenblatt and Paul Tudor Jones sold out their holdings in the same quarter, unloading 13,294 and 23,800 shares, respectively. They sold at an average price of $22.84 per share for a gain of 13.1%.
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