1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Sydnee Gatewood
Sydnee Gatewood
Articles (963) 

Mario Cibelli Curbs Position in Restaurant Chain J. Alexander’s Holdings

Company’s board is reviewing value-creating options, including potential sale

September 17, 2019 | About:

Marathon Partners Equity Management founder Mario Cibelli (Trades, Portfolio) disclosed on Monday he trimmed his J. Alexander’s Holdings Inc. (NYSE:JAX) position by 15.6%.

Known for focusing on less efficient portions of the market, the activist investor’s firm relies on fundamental research to find long-term opportunities among undervalued stocks.

According to GuruFocus Real-Time Picks, a Premium feature, the guru sold 132,200 shares of J. Alexander’s on Aug. 26. He now holds 715,000 shares, which represent 3.49% of the equity portfolio. The stock traded for an average price of $11.75 per share.

GuruFocus estimates Cibelli has gained 16.05% on the investment since the third quarter of 2015.


The Nashville, Tennessee-based company, which operates restaurant chains like J. Alexander’s, Redlands Grill, Lyndhurst Grill, Overland Park Grill, Stoney River and Merus Grill, has a $172.96 million market cap; its shares were trading around $11.78 on Tuesday with a price-earnings ratio of 27.37, a price-book ratio of 1.37 and a price-sales ratio of 0.69.

The Peter Lynch chart shows the stocks is trading above its fair value, suggesting it is overpriced.


On Aug. 9, the restaurant operator reported second-quarter financial results, posting earnings of 15 cents per share on $62.2 million in revenue.

Following a buyout offer and letter from activist investment firm Ancora Advisors in April, J. Alexander’s also announced in August its board is exploring additional opportunities to maximize value for shareholders. Among these options is a possible merger or sale, a large strategic investment in the company, a significant share repurchase program and potential acquisitions of complementary businesses that will increase the revenue base and operating leverage.

GuruFocus rated J. Alexander’s financial strength 5.4 out of 10. Although it has sufficient interest coverage, the Altman Z-Score of 2.01 indicates the company is under some financial pressure.

The company’s profitability and growth fared a bit better, scoring a 6 out of 10 rating. Despite having a declining operating margin and poor returns that underperform a majority of competitors, J. Alexander’s has a moderate Piotroski F-Score of 5, which suggests business conditions are stable.

With 4.86% of outstanding shares, Cibelli is the company’s largest guru shareholder. Jim Simons' (Trades, Portfolio) Renaissance Technologies and Paul Tudor Jones (Trades, Portfolio) also have positions in the stock.

Portfolio composition

Cibelli’s $242 million equity portfolio, which is composed of 16 stocks, is heavily invested in the consumer defensive sector with a weight of 38.48%.


As of the end of the second quarter, the guru’s five largest holdings were e.l.f. Beauty Inc. (NYSE:ELF), U.S. Foods Holding Corp. (NYSE:USFD), PayPal Holdings Inc. (NASDAQ:PYPL), HD Supply Holdings Inc. (NASDAQ:HDS) and GrubHub Inc. (NYSE:GRUB).

Disclosure: No positions.

Read more here:

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

About the author:

Sydnee Gatewood
I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

Rating: 0.0/5 (0 votes)


Please leave your comment:

Performances of the stocks mentioned by Sydnee Gatewood

User Generated Screeners

pascal.van.garsseHigh FCF-M2
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)