singlebestidea.com

We follow a small universe of small cap and micro cap stocks traded on major exchanges, where a small investment is generally a larger proportion of ownership than can be had with similar dollar investments in larger cap stocks. We try to identify issues trading below private market value, which we believe have the potential to outperform. Information has been gathered from sources deemed to be reliable; however, no representations are made as to the accuracy of this information. You are encouraged to do your own research before acting on any material presented herein and we shall not be liable for any actions taken as a result of reading this material. Thank you.

Our mission is to choose the finest companies in which to invest for value, growth, and a peaceful night's sleep. Our goal is to own these stocks ahead of the crowd and sell them when they are loved.

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Please see the "Featured Issue" below. Our suggestion, as always, is to make purchases on days pf market weakness and always use limit orders.

Remember, purchasing a stock is never an emergency.

Featured Issue -- Update
September 2023
Rave Restaurant Group

Rave Restaurant Group (RAVE)

This Dallas, TX based company has been around since 1958. Best known for its casual, family friendly Pizza Inns, located mostly in the south, the company had undergone a radical transformation several years ago. Under the leadership of former Smashburger CEO, Scott Crane, the company freed itself from the burden of restaurant supply and became a pure franchisor. While this was quite painful for shareholders, the business slowly became a lean, clean, franchise machine. New CEO, Brandon Solano, is an industry veteran and a marketing pioneer, who has made significant changes to bolster the roster. Please refer to the company's SEC filings and news releases and you will be up to speed. We had expected Rave's business to begin growing again via multiple platforms. The traditional and familiar Pizza Inn chain, with approximately 123 US locations and approximately 34 International locations, provides a stable revenue stream, and had begun a palpable renaissance prior to the Covid-19 outbreak. We had expected modest comp store sales gains along with slow but steady unit growth over the next several years. but that outlook clouded as Covid-19 lingered. After a stumble out of the blocks, the newer Pie Five concept (approx 27 locations) has been refined. As the name implies, these quick service locales serve fresh made, high quality, personalized pizzas in about 5 minutes - perfect for today's warp speed world. New franchises occupy a smaller footprint making them more attractive to entrepreneurs and investors by reducing upfront real estate and build-out costs, thereby providing a pathway to more rapid return on investment. The smaller Pie Fives, along with the all new PIE (Pizza Inn Express) kiosk concept, are potential springboards for growth. The ability to get up and running more quickly, as well as generate consistent, high volume sales per square foot, make the smaller Pie Fives and the kiosk concept highly flexible formats. Imagine the possibilities: airports, malls, gas stations, convenience stores, truck stops, travel centers, big box stores, universities - heck, anyplace you need a good pizza. Unfortunately, capex spending came to a screeching halt due to Covid-19. Since then, management has refocused on bolstering and updating the Pizza Inn brand as folks have returned to enjoy the full buffet experience with friends and family, in addition to the increased take-out and delivery business.

As for the stock, we have owned shares in this company for the better part of 15 years, always purchasing in stages and selling when they've moved sharply higher. We advised building (or rebuilding) the position in September 2020, between $0.40 and $0.50. The earnings announcement at the end of that month provided an opportunity to sell those shares in the $2.00 range. In May 2022, the stock traded below a dollar and we recommended aggressively accumulating shares again. As always, we advise that you build positions over time, only make purchases on days of market weakness, always use limit orders, and remember that purchasing a stock is never an emergency.