Buffalo Wild Wings (BWLD), General Mills, Inc. (GIS): Wednesday’s Top Upgrades (and Downgrades)

Long story short, General Mills, Inc. (NYSE:GIS) is a terrific company with a storied brand name, great quality of earnings, and tremendous staying power. And you still shouldn’t buy it.

Could Buffalo Wild fly?
Hoping then that the “third time’s the charm,” we turn finally to restaurateur Buffalo Wild Wings (NASDAQ:BWLD), which caught an upgrade from Feltl & Co. this morning, and tacked on 1% in response. But does B-Dub deserve the improved market cap?

Sadly, no. Buffalo Wild boasts an impressive 19% projected growth rate, true. But its price-to-earnings ratio is a simply preposterous 28.8, and the company’s generating so little real free cash flow from its business (less than $15 million in real cash profits, versus reported “earnings” of more than $57 million) as to lift its price-to-FCF ratio well above 100.

Feltl’s rating change today only lifts the stock to “hold” from “sell,” granted, so at least the analyst isn’t getting totally carried away here. But even so, I don’t believe Buffalo Wild Wings (NASDAQ:BWLD) deserved the upgrade at all. At these high prices, investors should simply choose to eat elsewhere.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Buffalo Wild Wings and Rackspace Hosting (NYSE:RAX). The Motley Fool owns shares of Buffalo Wild Wings.

The article Wednesday’s Top Upgrades (and Downgrades) originally appeared on Fool.com.

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