TAST

Carrols Restaurant Group, Inc. (TAST) – Buy

Once again, I added more to my position in Carrols Restaurant Group, Inc. (TAST) at $6.90 now making Carrols my 2nd largest position.

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 $287,122 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

Facebook Inc (FB), Carrols Restaurant Group, Inc. (TAST), and Amazon.com, Inc. (AMZN) – Buy

   

Once again, I added more to my positions today in Facebook Inc (FB) at $144.41, Carrols Restaurant Group, Inc. (TAST) at $9.60, and Amazon.com, Inc. (AMZN) at $1587.31

The continued price drop in all three of these are a great opportunity. Retail sales are strong and Amazon and Facebook will benefit from this. Amazon with actual sales and advertising, and Facebook with advertising on Facebook itself and Instagram.

Amazon has been very aggressive with increasing it’s share of holiday sales and we are seeing that personally with our Wondermugs business. We have sold over twice as many mugs on Amazon this year compared to last year. With Facebook, we are personally spending significantly more this year on ads as well as for our clients of Advantage Creations.

With Carrol’s the price drop is just making the company very cheap. At today’s price, the market is valuing the 828 stores at only $729,773 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.

Some are thinking the economy is going negative. If that’s the case, people still need to buy goods, will still use social media and go out to eat. Amazon and Carrols provide great prices on products. Facebook/ Instagram will still be used.

There are of course other pressures on these specific companies. Facebook with it’s privacy concerns, Amazon with other retailers getting more competitive and Microsoft with cloud services and Carrols with McDonalds, but I believe at these prices all of these concerns are priced in and then some.

Here is my previous analysis on all three:

Carrols Restaurant Group, Inc. (TAST) – Buy

Once again, I added more to my position in Carrols Restaurant Group, Inc. (TAST) today at $10.79/share taking advantage of the recent price drop.

Carrol’s is now my 2nd largest holding.

I think at this level, it’s a great opportunity. The February earnings call had much to like in it. The last quarter and last year has shown the strong marketing capabilities of Burger King and how well Carrols in particular is at executing acquisitions and managing stores, despite increasing costs of beef and labor as well as increasing competitive pressure.

They continue to acquire restaurants which impacts earnings. However, book value continues to increase, which is how I choose to judge their performance along with total sales which continues to grow on same stores and total stores basis.

At this time, it’s estimated that Burger King franchise goes for over $500,000 to start one. However, with Carrols you are getting established franchises with top performing management in place for only $474,240 each as they currently have 807 stores and are valued at $382,712,000. From the earnings call above they have shown they they can quickly absorb and improve acquisitions and have several deals currently in negotiation right now, one of which includes 20-30 more stores. Overall, Carrols seems like a real bargain to me and I may continue to buy more shares if the price stays at this level or goes lower.

 

Carrols Restaurant Group, Inc. (TAST) – Buy

Once again, I added more to my position in Carrols Restaurant Group, Inc. (TAST) today at $10.79/share taking advantage of the continued price drop.

I more than doubled the amount of shares owned in Carrols with this buy. Carrol’s is now my 3rd largest holding.

I think at this level, it’s a great opportunity.

Carrols Restaurant Group, Inc. (TAST) – Buy

I added more to my position in Carrols Restaurant Group, Inc. (TAST) today at $10.94/share taking advantage of the continued pullback. Largest franchiser of Burger King restaurants. Adds efficiency to operations it acquires. Growing sales through acquisitions and comparable store sales. Increasing book value. However, short term profitability taking a hit due to increased labor, beef and promotions costs.

Here’s some comments from Motley Fool regarding Carrol’s.

I think at this level, it’s a great opportunity.