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No. of Recommendations: 4
I've followed for a while. I am less interested in the price differential from $10-$15 and more interested in their ability to drive comps. The business should have a meaningful catering opportunity, but the #1 driver is of course in store sales. I've seen some service issues at GA locations, and I think tightening up the guest experience will do wonders for SSS over a 2-3 year period.

I appreciate the lack of true direct fast casual competition. Yes they have to compete with the sea of other general options, but unlike Chipotle, at least there are not five options offering almost the exact same food.

If they can get comps back up to the 4% range, with their growth runway the market can price out a golden future, so I'd rather see signs of trending towards that eventuality and buy at $15 (or a bit higher) than try and buy lower. I don't see it turning into NDLS (ZOES much better concept), but expansion without the SSS is not a winning game unless really cheap and a good balance sheet.

If you are looking in the space, I think CHUY is worth a look (small long-term position). Not cheap at the moment, but think management team is pretty good, the store model pretty good, and solid growth runway.

The other name I need to look at closer is LOCO. Seems relatively cheap on its face, but I don't know the business well enough to know what I am missing. Stock at $9, guiding to .68-.73 for 2018 vs. .63 in 2017. Guiding for flat comps, with mixture of franchise and company locations to be added.
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