*****Steak N Shake Co.

Steak N Shake is a “steakburger” chain that has been around since 1934. The company’s stock trades on the New York Stock Exchange under symbol SNS and goes for about $8.20 a share. This retro 1950’s hamburger/shake joint has inside wait-service/ and drive thru service. There are about 450 restaurants, most located on free standing real estate pads. The food is pretty decent. The service is borderline horrendous. The bulk of the stores are located in the southeast/midwest.

SNS’ common stock is currently trading close to it’s  8 year low. Based on MY due diligence, with the operative word here being, MY, the management of this company is totally incompetent. Of the 450 locations, 50 are franchised and 400 are company owned. Personally, I think that  the aforementioned numbers should be reversed with franchisees owning most of the restaurants. In addition, the real estate which is being carried on SNS’ books at acquisition cost, is not adequately being monetized through sale/leasebacks.

If you do some due diligence here, you will find that a proxy fight is currently underway, in which a young 30 year shareholder activist named Sadar Biglari who owns about 8.5% of the common stock is trying to secure 2 out of 9 Board of Directors seats. This guy Biglari had two recent  great “hits” when his shares in Friendly’s were bought-out by Sun Capital and his Applebee’s shares were bought-out by IHOP.

SNS could prove to be a very interesting stock situation. MY due diligence indicates that “if” the right guys were running this business and “if” the stock market was stronger and “if” the general economy was in better shape, this $8.20 stock could be worth well north of $20 a share. Then again,  “if” my father was my mother…

If you like this sought of stuff, do some reading and studying and maybe SNS will prove to be more than a steakburger joint for you.