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Subject:  Re: Reflecting on restaurants/retailers & pessim Date:  1/2/2018  9:26 PM
Author:  TMFPencils Number:  7208 of 7242

Hi Rob,

Ever looked at J Alexander (JAX)?

I haven't taken a look at JAX before -- but you've piqued my interest with a small-cap restaurant. :-)

A few things I noticed about JAX after a quick glance:

-- consistently growing revenue each year, although earnings have been inconsistent (but positive)
-- net debt of $12.7 million, but that is down from $16.7 million at the end of 2016
-- has generated positive free cash flow in four of the past five years, and has produced $3.8 million in FCF over the past four quarters

They have 43 restaurants spread across four concepts and 15 states, leaving what should be some clear pathways for future expansion. I'd have to do a little more digging into those four concepts and how they stand out, but the numbers are promising to me -- especially if free cash flow production improves and debt is lowered further in the quarters/years ahead.

The stock has been a rollercoaster and I can't say the valuation looks particularly compelling, but I could be missing something. Would be curious if you or others have thoughts about JAX. Added it to my watchlist, though, and will keep an eye on it.

David K
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