Rave Restaurant Group: This Pizza Franchise Turnaround Is Ready To Inflect After Three Decades Of Deterioration.
An asymmetric situation in a thinly traded nano-cap. In one word: tasty.
As Peter Lynch quipped: Turnarounds seldom turn. But if you find they do turn, they reward richly.
Today, Rave Restaurant Group franchises two pizza chain concepts. Since the turn of the millenium, the older of the two chains (Pizza Inn, founded 1958 in Texas, US) experienced deteriorating perfomance and decline. In the 2010s the company created a second pizza chain (Pie Five) to combat the decline, but failed. It seems that by 2018/2019 the company was nearly insolvent. In 2019, a new CEO managed to stabilize the company by driving cost discipline, branding, and focus.
I believe this nano-cap stock presents a highly asymmetric risk-reward situation now. This article provides three scenarios that show: the downside is limited while the upside scenarios (while uncertain) indicate multi-bagger potential. In fact, I lay out a potential path for 100-bagger that is in the realm of possibility.
And seriously… who doesn’t like Pizza?