is anyone up to speed on the news for stock pzza, papa johns?

Question

Doing some research on them and I see that their shares have went down a lot in the past year and they have a lot of insider trading, 20% of insider shares have been sold in the past year. I also see that they sold operations in the UK and are downsizing I guess? They also seem to be going around and managing their insurance expenses as they used to selfinsure then they switched to an actual insurance company and then they switched accounting. This stock overall just seems to have a lot of problems. As I said Im just doing research on it would love some pointers of what I should look for in the filings or any opinions overall.

Answer 1

One thing I think is important is what they earn and their potential to keep earning it. Last year (Feb 07) they had a billion in sales (something like about 3 percent increase over previous year) and something like $1.47 EPS. In August their earnings target was about 38 cents but they earned 40 cents. Part of the problem was that the "concensus" of the market's armchair quarterbacks thought that the second quarter earnings should have been something like $263 million, but was ONLY $256 million (how dare they?!?).

My guestimate is that some are thinking that things like general consumer confidence ostensibly lower, higher fuel prices (customers and delivery), and with a possible recession looming then the discretionary spending on pizzas will be punishing the future earnings. On the other hand, PZZI, not nearly as successful (and tasty, I prefer Papa John's) was punished bad this summer, but has been recovering somewhat steadily since. There is this nagging profitability that was hard to continuously ignore. Look for that for Papa Johns, a much better company (and product). But then if YUM (Pizza Hut in there, as I recall) can climb despite the economic pessimism, you could be getting it cheap if Papa Johns reports more good numbers, even if the prognosticators are embarrassed yet again. Good luck, you could easily do worse than Papa Johns.