Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of wing slinger Buffalo Wild Wings
So what: As the big spike in B-Wild's stock suggests, the numbers for the final quarter of the year looked great. Total revenue was up 35% from the prior year, while earnings per share jumped 33% to $0.73. The strong top-line growth was driven in large part by outstanding performance at company-owned restaurants. Revenue at those locations climbed 36% on an 8.9% increase in comparable-store sales.
Of course, no company gets this kind of love from Mr. Market if it doesn't perform well in the quarterly Wall Street beauty contest -- that is, the comparison of the company's actual results to Wall Street's average estimates. In this case, Buffalo Wild Wings beat on both the top and bottom line. Analysts were expecting earnings per share of just $0.67 on revenue of $211 million.
Now what: A longtime Fool favorite and a current recommendation of multiple Motley Fool newsletter services, there's a lot to like about Buffalo Wild Wings. With searing growth as in the 2011 fourth quarter, investors couldn't be blamed for paying a pretty penny for B-Wild shares, but for a value-focused investor like me, the current valuation -- which puts shares at 30 times 2011 earnings -- is more likely to give me indigestion than anything else.
That's a risk-averse view that's kept me away from some poor picks, but it's also left me merely enjoying the wings while B-Wild's stock has absolutely crushed the rest of the market over the past few years. Management noted that 2012 has started off on a great note, and it's looking for 20% earnings growth in 2012. This is a sharp management team that has consistently delivered in the past, so even if I'm not actively betting on the stock, you won't catch me betting against it.
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