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Papa John’s Arrives Burnt! Shareholders Cheesed Off! (PZZA)

Posted on October 18, 2021

We’re ordering up a gourmet trade for you today, with all the risk/reward favorability you demand from your local boutique pizza maker.

And we don’t scrimp on toppings!

Papa John’s International Inc. (NASDAQ:PZZA) is among the world’s largest dough-flippers.  With a market cap of $4.5 billion, not many can hold a pepperoni to PZZA’s clout in the junk-food arena.

That said, the company’s numbers are pathetic.

It’s dripping all over my arms!

Fundamentally, we have some ridiculous goings-on –

  • To begin, the stock carries NO P/E (i.e., has no earnings),
  • Pays a dividend of 1.14% (but for how long?),
  • Has no Price to Book ratio (i.e. no Book Value),
  • Saw Q/Q earnings DROP a whopping 577.80%,
  • And perhaps most poignantly, insiders saw the whole damn carnival coming, and over the last half year sold 65.66% of their holdings for a fancy payday of $80 million!

Putting The Boots to The Pie-Makers

Papa John’s – like many other bricks and mortar retail operators – also has a staffing issue.

Public policy has created a systemic absurdity whereby it’s currently more lucrative for Joe College to collect a government handout for NOT working than to go find a low-paying job like those on offer at his local pizzeria.

The company wants to open more franchises, but finding workers is a huge challenge.  And that may dent forecasts far more than most are reckoning.

Same store sales declined last quarter on the back of reduced operating hours (i.e. no workers) for the first time in a decade!

And that bodes ill for the stock.

Take a look at the daily chart –

This is a stock who’s weary, who’s insiders feel it, whose fundamentals and technicals have lost all their juicy cheese flavor, and who’s bound for a fall.

May the G-d of Israel be with us.

With kind regards,

Hugh L. O’Haynew

 

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