Like all businesses, restaurants succeed by offering customers what they want. And, what customers want from a casual dining restaurant is tasty food, great service, a clean and upbeat atmosphere, and of course appealing pricing. When offered these features, customers will keep coming back – producing strong profits for the owners.
With the longest running economic expansion in modern history, at 28 years, Australia’s economy has truly been a wonder. The Land Down Under has benefited from the relent- less expansion of its neighboring giant China, as well as growth in other Asian and global trading partners.
In nearly every case, the shares of a company in bankruptcy become worthless. In very rare cases, however, they can become great investments. W.R. Grace (NYSE:GRA) shares produced a 75-fold return, as an example. With California utility PG&E (NYSE:PCG) now in bankruptcy, the range of possible outcomes for its equity is wide.
In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple. We thought it might be useful to describe this measure and why we like it.
This Forbeswrite-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.
George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."