Groove Community Update – Buy RAVE & CVSL

October 6, 2015 at 11:32 am 5 comments

We have received several queries from Groove community members following the last few trading sessions and we wanted to provide a community-wide update.

RAVE shares have been falling since the company reported Q4 and full year earnings for the year ended June 28, 2014. It appears that investors / traders may be growing impatient and/or were simply underwhelmed by the company’s top line, we believe that view is short-sighted. Rave’s move into the Chicago and Atlanta markets will be big drivers of revenue growth going forward and the majority of the new restaurants in those markets were opened after June 28. Thus, the substantial increase in revenues will not begin to show in the financial statements until Q3. RAVE’s store count has more than doubled since the beginning of the year (from 31 stores Dec. 28, 2014 to 70 stores open now) and the growth is only accelerating for the remainder of the year with 20+ restaurant openings slated for the last three months of the year. More importantly for those hyper focused on RAVE’s top line, the corporate owned restaurant additions were heavily weighted towards the July – December period this year, so there should be significantly higher revenue growth in the back half of calendar year 2015. The bottom line is that this market has grown far too focused on the extreme near term and those who miss the big picture may miss another opportunity to buy RAVE in the single digits. RAVE is a screaming buy in the current $8.30-$8.60 range.

CVSL has given up nearly all of September’s gains and has traded back to the $1.50-$1.60 range, which we feel is both ridiculous and fortuitous. The company and its subsidiaries appears to be hitting on all cylinders and everypiece of anecdotal evidence we can track down suggests a good finish to Q3 across all divisions. This continuation of the growth evidenced towards the end of Q2 should be the focus of investors and we are very surprised that we have the opportunity to buy shares in this range again. We hope that Groove community members and CVSL company sales reps will take this opportunity to buy a piece of CVSL below $2, as it will not be around for long. CVSL below $1.80 is dirt cheap and we see the current trading range as one of those “back up the truck” opportunities.

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Groove Portfolio Update – RAVE, INUV, MARK & CVSL Update – Reading the CVSL Tea Leaves and a Pie Five Pizza IPO

5 Comments Add your own

  • 1. Roy Grannell  |  October 7, 2015 at 4:44 pm

    Good analysis, is there an easy way to discern between which stores are company owned versus franchised?

    Reply
  • 2. Colt  |  November 20, 2015 at 4:39 pm

    Well, Cvsl back to all time lows. Just zero buyers. Better hold $1. Why isn’t management fighting for us?

    Reply
    • 3. Colt  |  November 23, 2015 at 3:05 pm

      Ugh Cvsl is dying. Someone needs to be an inside buyer.

      Reply
    • 4. jwbuffett  |  December 7, 2015 at 3:03 pm

      Colt, sorry for the delay. All replies from the last 30 days are showing in a different location now and we did not realize they were there. We agree wholeheartedly, management needs to step in an address what is happening and I will be surprised if there is not some insider buying too

      Reply
  • 5. Tim  |  November 23, 2015 at 11:22 pm

    Colt – Looks like they are ramping up for another purchase. Filing today raising $4mm.

    Reply

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