Can Private Equity Interest Revitalize Buffalo Wild Wings?


27% profits every 20 days?

This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.


Buffalo Wild Wings (NASDAQ:BWLD) received a takeout offer of around $150 per share from private equity group Roark Capital. The offer would give some investors who bought the stock ahead of the third quarter earnings report a hefty return but would leave some longer-term shareholders with a loss, as the stock briefly traded north of $200 per share in 2015.

The Analyst

Stephens' Will Slabaugh maintains an Equal-Weight rating on Buffalo Wild Wings' stock with an unchanged $115 price target.

The Thesis

Roark Capital's assets in the restaurant sector focuses on franchise-based companies, including Arby's, Auntie Anne's Pretzels and perhaps most notably, a former stake in Wingstop Inc (NASDAQ:WING), Slabaugh said in a Monday note. (See Slabaugh's track record here.) 

The private equity firm is a "prime candidate" that could boost Buffalo Wild Wings' business, including improving the overall experience, menu quality and value, the analyst said. 

An offer over $150 per share represents a 28 percent premium from Monday's closing price and a 9.5x multiple on the analyst's fiscal 2018 EBITDA estimate.

Stephens' prior Equal-Weight rating was based on the assumption that Buffalo Wild Wings as a stand-alone company would continue to show top-line weakness, declining perception among consumers and a decrease in everyday value offers, Slabaugh said. 

Price Action

Shares of Buffalo Wild Wings soared higher by more than 26 percent to trade at $148.80, just shy of the takeout offer.

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Photo courtesy of Buffalo Wild Wings. 


27% profits every 20 days?

This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.


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Posted In: Analyst ColorReiterationRestaurantsAnalyst RatingsGeneralCasual Fast Foodrestaurant chainsrestaurantsRoark CapitalStephensWill Slabaugh