In corporate finance…basic types of investments are current possessions and fixed assets. Current possessions include cash, inventory, and accounts receivable. Examples of fixed resources are buildings, real property, and machinery. Furthermore, the resource allocation function can be involved with intangible assets such as goodwill, patents, workers, and brands. In accounting: The balance sheet assets are ordinarily subdivided into current property and noncurrent property. The former include cash, amounts receivable from customers, inventories, and other property that are expected to be consumed or can be easily changed into cash through the next operating routine (production, sale, and collection).
But as I read them, for the most part, I see problems more with people just not liking Biglari and some of his methods. But I don’t see anything really glaring that is a large problem. I actually think he could be truthfully trying to do well. So, setting aside all of these distractions, let’s see how he could be doing in the business. So let’s get down to business. So when Biglari had taken over management of the SNS, the basics were terrible.
Customer traffic was down consistently, as being same-store sales. The strong statistics show how SNS has done since Biglari took over. There is a huge change. So there’s a very noticable improvement. That Biglari is known by us has made a big positive change at SNS. In January They just opened a fresh store concept on Broadway in NYC to create the Steak and Shake Signature, which are similar to a fast food joint with counter service only and few tables. The yelp reviews are combined (as they always appear to be) but I’ve noticed recently from people outside NYC that they actually like the Steak and Shake stores.
Yes, the burger market is congested with everyone from McDonald’s to the modern Five Guys, Shake Shack, In-and-Out, and many others. BH will deal with the restaurants for their cash moves so will continue to invest as long as they can do this with good results. Otherwise, they will allocate capital to other areas.
So that is the real question. I’m not really that interested in a hamburger joint, but am thinking about what Biglari can do with it and where BH will invest capital in the future. Right now, the next largest piece of BH is Cracker Barrel (CKBL), which BH owns 15% of and is wanting to activist the stock back again to health.
- 7 years back from Lincoln, Nebraska
- 4% (2017 est.)
- Deutsche Bank or investment company
- 2008 +20.8% -9.6%
- Excellent written and verbal communication
- Sound Intellectual Framework For Decisions
Maybe the CKBL dilemma will be another post for a later date. I really do certainly buy into the wants of Biglari that the majority of businesses tend to get trapped in old means of doing business even if it is no longer the right way to go. THEREFORE I am not at all opposed or bothered with Biglari’s activism (up to now from what I’ve seen). Anyway, taking a look at BH was a bit confusing.
However, the BH is a strange animal and the GAAP statistics can be very misleading. For example, BH owns shares in a hedge finance that Biglari runs, but GAAP requires full loan consolidation of the collaboration units even though a big part from it is owned by hedge fund investors rather than BH. That’s fine. That is an issue with private collateral money too and investment banks, which have to consolidate holdings kept in their private equity businesses. But why is it confusing for BH would be that the hedge finance (The Lion Fund) owns a huge stake in BH.