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4-Star Stocks Poised to Pop: Buffalo Wild Wings

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 8:05PM

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Market-trouncing returns could be written in these four stars.

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, restaurant chain Buffalo Wild Wings (NASDAQ:BWLD) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Buffalo Wild Wings' business, and see what CAPS investors are saying about this Motley Fool Hidden Gems recommendation right now.

Buffalo Wild Wings facts

Headquarters (founded)

Minneapolis (1982)

Market Cap

$377.13 million

Industry

Restaurants

Trailing-12-Month Revenue

$392.6 million

Management

CEO Sally Smith (since 1996)
CFO Mary Twinem (since 1996)

Return on Equity (average last three years)

14.6%

Competitors

Brinker International (NYSE:EAT)
Darden Restaurants (NYSE:DRI)

CAPS members bullish on BWLD also bullish on:

Middleby (NASDAQ:MIDD)
Ctrip.com (NASDAQ:CTRP)

CAPS members bearish on BWLD also bearish on:

Starbucks (NASDAQ:SBUX)
Citigroup (NYSE:C)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS.

Over on CAPS, some 90% of the 814 All-Star members who have rated Buffalo Wild Wings believe the stock will outperform the S&P 500 going forward. These All-Star bulls include rwpiernot and iamnik77, both of whom are ranked in the top 2% of our community.

Last month, rwpiernot tapped the stock as a tasty turnaround: "Knocked down by general malaise in the financial sector. Expansion slowed due to slowed economy. Will resume upward trend when credit becomes more readily available and economy recovers."

In a more detailed pitch from two days ago, iamnik77 shares that bullish attitude. Here's an excerpt; click here to read the full pitch:

This is a small company with a lot of room to run. With a market cap of less than 500 million, I think it has room to get ten times its current size. ... This is one of the few chains that is actually drawing in the fast food college crowd but at chain restaurant prices. Also, the company grows fast but not too fast which will protect its balance sheet in the event of a downturn like the one we are in. In a market like this, this P/E would normally seem too high but the key here is that with such a small market cap this one has room to run. I believe it is a near lock to grow at 15% for possibly the next ten years. Stocks have this kind of potential are very hard to find.

What do you think about Buffalo Wild Wings, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Buffalo Wild Wings, Middleby, and Ctrip.com are Motley Fool Hidden Gems recommendations. Starbucks is a choice of Inside Value and Stock Advisor. The Fool owns shares of both Buffalo Wild Wings and Starbucks. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

Buffalo Wild Wings, Inc. Stock Quote
Buffalo Wild Wings, Inc.
BWLD
Starbucks Corporation Stock Quote
Starbucks Corporation
SBUX
$87.27 (1.48%) $1.27
Citigroup Inc. Stock Quote
Citigroup Inc.
C
$54.00 (1.52%) $0.81
Brinker International, Inc. Stock Quote
Brinker International, Inc.
EAT
$31.40 (3.60%) $1.09
Darden Restaurants, Inc. Stock Quote
Darden Restaurants, Inc.
DRI
$130.23 (0.27%) $0.35
Trip.com Group Limited Stock Quote
Trip.com Group Limited
TCOM
$25.94 (2.29%) $0.58
The Middleby Corporation Stock Quote
The Middleby Corporation
MIDD
$151.76 (0.64%) $0.96

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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