Wednesday, April 29, 2009

Benihana (BNHNA): Another Ignored Restaurant

Last January, Scott Rothbort recommended Benihana (BNHNA) when it was trading around $2.30. It's roughly doubled since then.

For the last month, leading into some good earnings, the stock has been on a tear -- doubling. Despite the big move up and hitting Scott's earlier target, I would hang on to it from here.
It's significantly lagged other consumer restaurant chains over the past year, even with its move in the last month. The trailing Enterprise Value to EBITDA multiple is 2.7x vs. PF Chang's China Bistro (PFCB) at 6.8x. BNHNA has a much heavier debt-load relative to its cash than PCFB. But in this environment, with some positive earnings, a further doubling in shares from here isn't unreasonable. The stock is up big today, so you might want to wait for a better entry.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider BNHNA to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

Position: None.

Originally published in on 4/24/2009 2:01 PM EDT

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