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RVB's Market Musings

What began here as an avenue to interact and learn has far exceeded those goals.

If you are a prospective employer, please consider this site a place where you can see my passion for investing...

Monday, February 19, 2007

Midwest Cold Ideas

So off the sports, I am thinking that Panera (PNRA) may put up a poor comp number for February on the first Wednesday of March. I mean, the first two weeks of this month, I barely left my couch and when I did it was only when I absolutely had to. Friggin' cold. Period. (PNRA still has a strong Midwest bias in its geographic footprint) I tried to look at weather trends and compare them to the same-store numbers. Alas, I could not detect a significant pattern with precision. However, I do recall the company citing weather in other press releases. Two data points of anecdotal evidence here in Madison also counter my idea. Nonethless, if a poor number comes, it could be another buying opportunity. That said, the company does need to work out growing its same-store sales because lunch is so strong it is getting hard to grow that part of the biz. I'm still a buyer in the low 50's - love the risk/reward there.

We bought some CPSI the other day. At some point, the current softness in the rural HCIT market should ease and the company could trade at 20 times 2+ dollars of earnings potential. This means there could be some 40-plus % upside all the while collecting on a 5% dividend to wait for the turnaround. Seems like a solid opportunity to me - not much downside while there remains some serious upside. For "surprise" investors or momentum players, wait for the next quarter to see Q2 guidance. Backlog is still up 6% Y/Y while analysts think revenue will only grow 2.7% this year.

disclaimers: I do not own shares in either of these companies currently, however, I am planning on buying CPSI tomorrow (2/19)


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