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Pinching Dough – Panera Bread, Others Rise as Disposable Income Shrinks

September 22, 2013 | About:
Sally Jones

Sally Jones

49 followers
American disposable income is shrinking, which means more people will be eating at home. According to Investment Contrarians, “In September 2012, the real disposable income in the U.S. decreased by 0.1%. In August 2012, it declined 0.3%. At the same time, the U.S. personal savings rate is also retreating—down to 3.3% of disposable income in September compared to 3.7% in August.” How does this affect restaurant goers? Americans have already reflected a drop in away-from-home dining. Aside from the highest fast food consumption, Americans were surprisingly low restaurant spenders in 2012, compared to 18 other countries that spend more per year, according to the Huffington Post.

Here’s an update on three well-known American restaurant companies held by billionaires. Some food servers are feeling the pinch, but not Panera Bread Company:

Panera Bread Company Inc. (PNRA)

Panera Bread Company Inc.is down 3% over 12 months. The company has a market cap of $4.97 billion; its trades with a P/E ratio of 26.40. The current share price is $168.43, which is 13.5% off its 52-week high of $194.77.

Originally organized in 1981 under the name Au Bon Pain Co. Inc., Panera Bread Company Inc. is a national bakery-cafe concept with 1,652 company-owned and franchise-operated bakery-cafe locations in 44 states, the District of Columbia, and Ontario, Canada. The company operates under the Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Café trademark names. The company’s three business segments are bakery-cafe operations, franchise operations, and fresh dough and other product operations.

Panera Bread reported its fiscal second quarter 2013 financials with net income of $51 million, up from $44 million in the same quarter a year ago. Diluted earnings per share for the quarter are up 16%, at $1.74 per diluted share.

Guru Action: As of June 30, 2013, seven gurus hold PNRA and there is active insider trading.

Three gurus made new buys in the second quarter, with the largest buy made by Pioneer Investments, buying 45,974 shares at an average price of $183.29, for a loss of 8.1%. Pioneer Investments now holds 0.16% of shares outstanding.

After a remarkable five-year history of gains, many times exceeding 100% for the quarter, Steven Cohen sold out in the second quarter. He unloaded 501,856 shares at an average price of $183.29 for a loss of 8.1%, his first down quarter with PNRA.

Tracking historical share pricing, revenue and net income:

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Ruby Tuesday Inc. (RT)

Ruby Tuesday Inc.is up 2% over 12 months. The company has a market cap of $461.69 million; its trades with a P/B ratio of 0.90 and P/S ratio of 0.37. The current share price is $7.52, with a change from average down 18%.

Incorporated in 1972, Ruby Tuesday Inc. owns, operates and franchises the Ruby Tuesday casual dining restaurant chain. The company owns and operates 706 restaurants and franchises 77restaurants. Its franchisees operated 33 domestic and 44 international Ruby Tuesday restaurants in 14 states, Guam, and 11 foreign countries, as of June 2013.

The company reported its second quarter 2013 financials with a net loss of $27 million. Ruby Tuesday’s total revenue decreased by 4.6% compared to the same period a year ago.

Guru Action: As of June 30, 2013, five gurus hold RT and there is active insider trading.

John Keeley and Hotchkis & Wiley bought a new holding in the second quarter of 2013. Keeley bought 2,539,142 shares at an average price of $9.16, for a loss of 17.9%. He holds 4.14% of shares outstanding after the trade.

Hotchkis & Wiley bought 834,800 shares at an average price of $9.16, also for a loss of 17.9%. The firm holds 1.36% of shares outstanding.

Tracking historical share pricing, revenue and net income:

1379785062193.png

BJ's Restaurants Inc. (BJRI)

BJ's Restaurants Inc. is down 31% over 12 months. The company has a market cap of $870.94 million; its trades with a P/E ratio of 28.80 and a P/B ratio of 2.30. The current share prices is $30.86, which is 32.4% off its 52-week high off $45.63.

BJ's Restaurants Inc. owns and operates casual dining restaurants in the U.S., with over 130 restaurants located in California, Texas, Florida, Arizona, Nevada, Colorado, Ohio, Oregon, Oklahoma, Washington, Indiana, Kansas, Kentucky, Louisiana and New Mexico. The company restaurants operate under the following names: BJ's Restaurant & Brewery, BJ's Restaurant & Brewhouse, BJ's Pizza & Grill or BJ's Grill.

The company reported its fiscal second quarter of 2013 financials with revenue of $198.5 million, up around 10%. Net income was reported at $8.6 million with a diluted net income share of $0.30.

Guru Action: As of June 30, 2013, three gurus hold BJRI and there are two recent insider sells.

The largest Guru stakeholder Manning & Napier Advisors Inc. reduced its position by 6.4% in the second quarter, selling 123,590 shares at an average price of $35.64, for a loss of 13.4%.

In five quarters of holding, the firm has averaged a loss of 18% on 1,932,250 shares bought at an average price of $37.76. The firm also averaged a loss of 13% on 123,590 shares bought at an average price of $35.64.

Tracking historical share pricing, revenue and net income:

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 3.0/5 (4 votes)

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