Andrew McCreathCBRL Group Inc.CBRLTOP PICKMay 04, 2005
Cracker barrel stores. Restructured a few years ago and has been doing very well. Excellent same store sales. Has been hurt as a result of rising oil prices. Has been hurt inordinately relative to the prospects.
(A Top Pick Jun 27/18, Up 8%) He has sold his position in this. They were rolling out new stores and changed their pricing of exactly the same item depending on the store's location. He looked on this as a risk and return. He made money on the name and has since moved on.
It's trading at about 16 times which is at the lower end of its historical range. They introduced a tiered pricing system. More affluent areas will have a higher profit margin. It is seems it is gaining traction. They have a good history of raising their dividend. He is a buyer.
They are rolling out varying pricing lines for different store locations, based on demographics and market differences. He likes their growth potential and sees franchising as a good future revenue stream generator. Yield 3%. (Analysts’ price target is $159.25)