Once again, I added more to my position in Carrols Restaurant Group, Inc. (TAST) today at $6.56 now making Carrols my largest position.
What I mentioned in the last post with my last purchase mostly still stands: (updated value per stored to $314k each)
The continued price drop is a great opportunity. The price drop is just making the company very cheap. At today’s price, the market is valuing the 1081 stores at only $314,000 each. To start a brand new store, you are typically looking at an initial investment of $1,200,000 to $2,800,000. These are mostly proven stores with excellent management in place.
The current price to book value is about half what it has averaged over the last 5-10 years. Carrols, is constantly increasing gross revenue and book value and future earnings potential while sacrificing short term net income, which I feel many investors are focusing too much on.
Adding the Popeye’s brand is also a great potential growth driver for the business especially with the popularity of the new new chicken sandwich. And Burger King’s Impossible Whopper seems to be doing quite well as well.
Some are thinking the economy is going negative. If that’s the case, people will still want to go out to eat. Carrols provides good food at great prices.
Here is my previous analysis: Carrols Restaurant Group, Inc. (TAST) – Buy