Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The ONE Group Hospitality, Inc. (STKS): Alta Fox Capital Management Thinks It Shares Could Double from the Current Price

Alta Fox Capital Management posted short comments on several stocks from its equity portfolio in its Q1 2019 Investor Letter (download here). Among those stocks was The ONE Group Hospitality, Inc. (NASDAQ:STKS), for which the fund said it believes it is currently undervalued, hence it represents a good investment opportunity. The fund also reported generating a return of 28.10% in the first three months of 2019, and 36.63% since inception, outperforming the S&P 500 both times. We present you full comments on The ONE Group Hospitality (STKS) from the letter:

“The ONE Group Hospitality Inc (STKS)

The ONE Group Hospitality Inc. (STKS) is a high-end restaurant owner, manager, and franchisor of high-end steakhouse chains and rooftop bars with good unit economics, a long growth runway for new stores, rapidly accelerating FCF, and a wide discount to peers. This opportunity exists because for most of the company’s history, the company’s brand value was not realized due to poor execution and strategy by the company’s founder. He stepped down as CEO in October of 2017 to allow Manny Hilario, a successful and widely respected restauranteur to become CEO. Hilario immediately accelerated SSS, cut SG&A, and shifted the company towards an asset-light growth strategy which will grow EBITDA ~30% this year and ~20% in the foreseeable future. Today, investors have the opportunity to buy into STKS at ~7x my base case estimate of 2019 EBITDA and a nearly 10% 2019 FCFE yield. We think shares can easily double from the current price through strong EBITDA growth and slight multiple expansion. Our full write-up can be viewed here.”

Foodies enjoying food

Copyright: stockbroker / 123RF Stock Photo


The ONE Group Hospitality is one of the leading hospitality companies in the US, famous for its restaurant brand STK. Year-to-date, the company’s stock is up by 20.63%, having a closing price on May 8th of $3.80. Its market cap is $108.78 million, and it is trading at a price-to-earnings ratio of 32.20.

In its financial report for the fourth quarter of 2018, The ONE Group Hospitality reported revenues of $25.8 million and diluted earnings per share of $0.11 compared to revenue of $21.5 million and diluted loss per share of $0.01 in the same quarter of 2017. For the full year 2018, the company disclosed revenues of $85.60 million and diluted earnings per share of $0.12 versus revenues of $79.66 million and diluted loss per share of $0.17 for the full year 2017.

Disclosure: None.
This article is originally published at Insider Monkey.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.