Just about sitting on a trendline and made a move back up on Friday. I do have a bit of history with Applebee's. I worked as a foreman remodeling the corporate owned restaurants for almost 10 years. I've actually been to their corporate headquarters in Overland Park, KS and met some of their upper management. During this time I got to know a bit about the interworkings of them over those years. I have only made brief plays with them in the past and I don't really know why I haven't played them more to be honest. The thing that has got me wondering more about them recently is rumors that I've heard. I know that somewhere around last October, some bigger hedge funds started pressuring them because they wanted to add them to their portfolio. In order for this to happen, on a corporate level, Applebee's needed to start trimming the fat. I.E. selling off unprofitable restaurants, cutting expenses, etc. I left the company in Michigan that did all these renovations when I moved to KY, but am still in touch and kept somewhat in the loop. Corporate has decided to do no renovations this year. Obviously, an attempt to keep expenses down. I also hear through the rumor mill, that there is a possibility that all corporate stores will be put up for sale to be franchised. This tells me that they're trying to cut even more expenses and just collect royalties and monies without the corporate headache of owning stores. This, too, can be a very profitable business strategy. I also know that they have closed down at least 2 of their corporate stores in Michigan. More fat cutting, I suppose. All the while that this has been going on, their pps has slowly risen. Just a bit of info. Been meaning to post it for a while.

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Appreciate you sharing Klipper...Applebees is a well run company by top notch management. Steve Lampkin CFO was again voted as one of the best CFO's in the country by IIMag - KNOBIAS: RAiDAR Story

Yeah, there sure has been rumors swirling about a possible buyout w/ Applebees but then again there seem to be new rumors everyday (thats not to say that where when there is smoke there isn't fire)...

They certainly have seemed to be cutting costs to try and increase shareholder value and perhaps at the very least prepare themselves for a possible sale, as you mention....

"Applebee's International To Close 24 Restaurants

March 21, 2007

Applebee's International announced that it is closing 24 of its 528 company-owned restaurants. System-wide, there are more than 1,940 Applebee's Neighborhood Grill & Bar restaurants. Of the 24 restaurant closings, 10 are located in two states in the New England region, while the remaining 14 are scattered across nine other states. The Company currently expects pre-tax charges for the first fiscal quarter of 2007 to include approximately $13.5 to $15.5 million in non-cash impairment charges for all 24 restaurants; approximately $8.0 to $10.0 million in lease contract termination costs for the restaurants expected to close in the first fiscal quarter of 2007; and approximately $0.5 to $1.0 million in other costs. The Company currently expects that lease contract termination costs for the remaining five restaurants will be approximately $1.5 million to $2.5 million."

"Applebee's Gets Several Bids-WSJ

April 26, 2007
The Wall Street Journal reported that Applebee's International Inc. stated that it has received several bids to be acquired. Applebee's described the bids as 'non-binding, preliminary proposals'. A committee reviewing strategic options and the Board will begin 'a second round of detailed due diligence discussions before asking potential buyers to submit definitive, binding proposals'. Appleebee's stated that it is also exploring a securitization of its royalty income stream and other assets, which could be used in either the recapitalization or by a potential buyer. Appleebee's independent directors formed a committee to explore alternatives for enhancing shareholder value, including a possible sale.


It took its recent beating after their earnings missed expectations after costs associated with closing of some stores gave them a q1 eps of .16 - "charges related to discontinued operations, impairments and other restaurant closure costs" totaled .23 a share - excluding these costs, earnings would have been .36 which would have beat Thom Financ estimates by a few cents...

Nevertheless, this stock trades at a 32 p/e - seems a bit rich to me right now w/ its situation combined with the current macro backdrop...I'm not sure that this one can make a substantial move to a higher level no matter how good the co. and its mnmgt are right now until some of these costs cutting measures show if they'll bear fruit, or.....some more new tasty buyout rumors by the good ol media...lol


Here is that trend line Andy I think you are referring too...

APPB - SharpCharts 2 from StockCharts.com

Maybe setting a volume alert on the options market for APPB can give one an early indication if a buyout were to be taking shape...

Good Luck.

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Just because I'm a mod doesn't mean I'm a stock geni........yet.

We're on the same page, Grizz, fundamentally and technically speaking. That's the trendline that I'm referring to and you elaborated on all the fundys that I was making reference to also. I know the Michigan market very well (I've worked in every one of their corporate stores). The ones that they closed were in less desirable neighborhoods and not very profitable, but the market still called for heavy leases. They have "modified" their corporate look several times over the last few years. They've even cleaned house with their national directors and architects. I've known Ray Bond, their previous National Facilities Manager, for around 18 years. There certainly seems to be something in the works. I've seen enough corporate buy-outs in my field to recognize that something is up. Just my opinion, but it's not an uneducated guess. I only wish that I could get more info out of a source that I have been dealing with for a great many years, but his lips are apparently pierced closed. lol.

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Oh yeah, one last thing. I'm not saying that insider trading goes on or anything like that.....lol. But isn't it at least a bit ironic that just before all the hedge fund stories and corporate initiatives were actually put to print, that APPB happened to find a bottom and has been climbing ever since? Hmmmm......

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lol....yeppers, but of course, it was only just a coincidence...

Great info Klipper, all around...muchos gracias!

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Skiing is your brain....Snowboarding is your brain on drugs.

Just because I'm a mod doesn't mean I'm a stock geni........yet.

I second that motion, Klip. I think i learn the most from Grizz's and your posts. I think it is a combination of the fact that the posts have substance and are interesting. For example, i would never had read Grizz's recent post in his market thoughts thread if i didn't know his posts previously. After all, it was quite lengthy but there was a bunch of information in there.

Hey Klip, have you been trading options? Just curious. APPB seems like another one that could be a prospect for LEAPS. Grizz opened some on EMC, very wise IMO. Especially since he opened the around 13 1/2. (Grizz hope you don't mind me posting that, i figured since you posted it that i could mention it here)

Anyhow, i don't think that i would go any further out than one year with APPB. Seems like it is getting closer to takeover. It also seems like when I'm doing some cursory DD on a stock just to consider/eliminate it, i check to see if it trades options first, them look into share structure, financials, products etc. If i am going to be long a stock i want to sell some covered calls while I am.

Case in point about options and the reason i am fully invested in the big boards now: If one would have put a measly $1000 in AQNT June calls the day DoubleClick was bought by Google, you likely would have turned it into $30k.

p.s. I say measly $1k because there were quite a few times when i lost more than $1k playing pennies back in my foolish days.

GLGK (good luck grizz and klip...LOL)

__________________
In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later.
- Harold S. Geneen

Hey pro - did you ever see my post on the goog thread right after their buy of doubleclick? I have lots of friends that work at Msoft (local to me)....and I had heard these two names in particular floated around in speculation as MSoft's possible next trgt since goog's acquisition...

"With Googles buy of Double Click....watch option volume and indicators for some of these that may now be on Google's competitors possible buyout list...
AQNT, VCLK, TFSM"


I had 2 contracts of AQNT (qbtii), and 2 of VCLK (qcsih) - Friday was a good day. - btw sold all 4

__________________
Skiing is your brain....Snowboarding is your brain on drugs.

Just because I'm a mod doesn't mean I'm a stock geni........yet.

I guess I didn't, grizz. But i am certainly happy that you made some cash doing so. Thata' boy, Grizzums!!!!!!!!!!!!!!

Props to you, my friend.........i certainly wish i could trade options right now because i imagine i would be about 125k richer right now (with a modest 50% gain each time....on average, of course). Just enough to pay off my credit cards and to buy myself a new Ducati monster and GT 500.



proclivity loves horsepower and the other simple beauties of life such as ........oh I don't know.......freshly shorn legs of the lady of your life or maybe filet mignon with bearnaise sauce?

__________________
In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later.
- Harold S. Geneen

No, Proc, I still don't trade options (or forex for that matter). Don't know why I don't enter into those fields other than I only have enough hours in the day to trade stocks. I spend some time every week learning or dabbling with other t/a indicators and trying to educate myself on market strategies, etc. I would say that they are in my future, but I still do fine with with straight trading at this point. I'm relatively conservative (if you can consider anything with OTC stocks conservative) when it comes to trading and I don't feel that I should start into those until I am even more knowledgable of them. I'm no whiz kid, like Grizz. lol.

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Money can't buy happiness, but I can buy a yacht and sail right up next to it.
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click here to join the team

That's what i'm saying....you know TA very well....mix that with a little FA and you have a recipe for options sweetness.

__________________
In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later.
- Harold S. Geneen

Hmmm....

"Ihop Bids for Applebee's Restaurant Chain, People Say (Update1) "

Bloomberg.com: Worldwide

Nice volume increase, and some near term bets being placed in the options market today...

APPB - SharpCharts 2 from StockCharts.com

I'm not really doing much trading, but this will be an interesting one to watch...

Good Luck.

__________________
Skiing is your brain....Snowboarding is your brain on drugs.

Just because I'm a mod doesn't mean I'm a stock geni........yet.

AP
Calif. Eatery Gives Toddler Margarita
Friday June 15, 4:31 pm ET
Toddler Gets Sick After Calif. Applebee's Accidentally Serves Margarita in His Sippy Cup

ANTIOCH, Calif. (AP) -- Kim Mayorga was confused when her 2-year-old started making funny faces and pushing away the apple juice he had ordered at Applebee's. The explanation came when she opened the lid of the sippy cup and was hit by the smell of tequila and Triple Sec.

ADVERTISEMENT
The restaurant staff accidentally gave Julian Mayorga a margarita Monday. He grew drowsy and started vomiting a few hours later and was rushed to the hospital.

"I wasn't going to make a big deal about it," the mother told the Contra Costa Times on Thursday, "but then he got sick."

The apple juice and margarita mix were stored in identical plastic bottles, and the manager mistakenly grabbed the margarita container to pour the boy's drink, said Randy Tei, vice president for Apple Bay East Inc., which owns the franchise restaurant and nine other Applebee's in the San Francisco Bay area.

The Mayorgas will be reimbursed for their medical bills, and Tei said the franchise group's restaurants will no longer serve apple juice and margaritas in similar containers.

"We absolutely believe it was an honest mistake," Tei said.

The serving appeared to have been accidental, Antioch police Lt. Pat Welch said. Mayorga said her son is now doing fine.

She said the company has been very apologetic and offered free meals, but she added, "If they think I'm going back there, they're ridiculous."

__________________
In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later.
- Harold S. Geneen