Been once to GYG , not really finding much appealing on the menu, saturation of stores in my regional area in past 2 years.
reported on the ABC today
The current valuation puts GYG on a PE of 500x this year’s prospectus earnings forecasts of 6 cents per share, and on 145x next year’s forecast of 21 cents per share.
“You can talk about the plans to expand to 1000 outlets and you could price in some of that potential growth, but it’s only going to happen if the Mexican wave continues, and if it doesn’t the current share price is valuing each outlet at $17.8 million.”
“Anyone who runs a franchised fast food joint will tell you, that’s ridiculous.
“So you are paying a lot for a future that is uncertain.”
“If they had 1000 outlets in Australia that’s one outlet per 25,000 people.”
“That means there would be 203 GYG outlets in Melbourne, 212 in Sydney, 52 in Adelaide.
“Need I go on.
“You get the idea.
“It’s a liquidity squeeze not an undervalued stock. I’m not going to buy it,” Padley wrote.
(20min delay)