We are adding BFI to the Hedgeye Restaurants Best Idea list as a LONG. We will be hosting a Black Book presentation on Friday, February 12th, at 12:30 PM ET.
BFI is one of the more interesting recent restaurant SPACs that has completed its qualifying transactions. Important to note that it has also not filed an S1 or has held a quarterly earnings call! I mention this upfront because these are the two most significant risks to the stock in the short term. The company recently released 2020 top-line information; bottom-line profitability is still an unknown. To be clear, 2020 was a challenging year for many restaurant companies; BFI was no exception.
That said, BFI is a very compelling 3-5 year restaurant growth story looking past the potential negative headlines:
- "Purpose-built" better burger concept, with an asset-light strategy.
- Timing is right for development - compelling 4-wall unit economics.
- Strong unit growth potential.
- Management and regional concentration.
Our investment thesis for BFI is not about the next quarter or easy comparisons in 2021. Since coming public, CMG is up over 10x, WING 7x, and SHAK 4x. BFI has all the making of similar performance; it's now up to the management team SPAC sponsors to deliver on that potential.
We will follow up with the call details.
