Dueling Fools: Buffalo Wild Wings Bull Rebuttal

As you know, Tim, it's always good to review the companies in your portfolio to look for signs of weakness. But with Buffalo Wild Wings (NASDAQ:BWLD), a Motley Fool Hidden Gems selection, what you see as problems, I see as excellent management guiding a company through challenging conditions.

Well-managed growth
Growth is never cheap. There are three primary ways to finance growth. One is through issuing stocks, the favored method of technology giant Cisco Systems (NASDAQ:CSCO), which regularly uses its shares as currency. Another is through the use of debt, which is the way General Electric (NYSE:GE) typically operates. The third, and most preferable way, is through using cold, hard cash.

And that's the way Buffalo Wild Wings is growing its business. While you complain of slower growth, I applaud B-Dub's for growing only as quickly as its operating cash flow will allow it. It shows excellent discipline and a focus to do right by investors.

Chicken prices
The price of chicken wings makes up a significant cost of operations, but chicken wings are a commodity, just like oil. And commodities are inherently cyclical beasts. While oil producers like ExxonMobil (NYSE:XOM) are practically minting money today because of high selling prices for their products, oil fetched less than $10 a barrel just a few years ago. Clucking closer to home, it was just in the past year or so when egg producer Cal-Maine Foods' (NASDAQ:CALM) stock collapsed along with egg prices, near the end of the Atkins craze. Chicken wing prices, too, will fall back down. What matters is how well Buffalo Wild Wings manages itself along the way. Showing profits in spite of rising costs is a clear indication of a problem under control.

No company is perfect, but how well a firm handles the issues that head its way says a lot about the quality behind the name. Buffalo Wild Wings is certainly handling itself well, in spite of slower growth and rising commodity costs. And as such, it deserves serious consideration.

All of this talk getting you hungry for some B-Dub's? First, why not check out Chuck's original bull argument, as well as Tim Beyers' bearish outlook? The discussion wraps up with Tim's rebuttal. Then, don't forget to cast your vote for this week's winner.

At the time of publication, Fool contributor Chuck Saletta owned shares of General Electric. He had no financial stake in any other company mentioned in this rebuttal. The Fool has a disclosure policy .