RE:RE:RE:RE:Eastern storms People are looking for answers where there are really no good ones.
This stock has been a drama/saga for most institutional holders and after the failed sale attempt, some large institutional holders who came on with Denis bailed.
Then you had tax loss selling, oil, and all the other garbage that has plagued the canadian markets...and here we are.
That being said, I believe the opportunity is now.
Insiders are voting with their wallets with Peter Mammas- founder of Baton Rouge putting some serious coin to work at these levels. He sold Baton Rouge to IRG and knows the value of the brands.
Scores will take a couple qtrs to fix but with the right brand leader (which I thnk will be forthcoming), the results will be similar to Baton Rouge which as recently as a few qtrs ago was comping -6 and seems to be well on its way to postiive territory.
The momentum seems to have waned and so has the stock TODAY. I would argue the best time to buy things is at maximum pessimism and low valuation. Today you can purchase IRG at 4-5x EBIT with a good new manager with restaurant experience and motivated board/shareholders who will look to monetize this asset the right way in a sale when all the brand's performance line up.
While the saga has been frustrating, I believe that is the opportunity today with management/incentives finally alligned.
I would also argue that although Scores will take some time to turnaround, it is my understanding that all the other brands are doing well and will benefit form lower oil as all the provinces where the restaurants exist are net importers of oil...Also dont forget that this company has a hidden asset in its retail liscencing division selling ribs/etc. in the grocery store. I believe that business overtime could be worth the entire marketcap.
While the sale failed a few months ago, I think the Engine/Crescendo endgame remains the same.
Fix, grow, sell.
Hard to lose money at these levels.