Stifel Nicolaus Says Biglari Could Take Activist Role in Cracker Barrel (CBRL)

Investors are bidding up shares of Cracker Barrel (Nasdaq: CBRL) this afternoon following a 13D filing from Sardar Biglari's Biglari Holdings Monday after the market closed.

Cracker Barrel shares last traded at $47.35, up 6 percent for the session.

In the SEC filing, the fund disclosed a brand new 9.7 percent stake in the restaurant, making Biglari the largest holder of CBRL shares.

Bullish comments from Stifel Nicolaus' Steve West may be adding to upside Tuesday.

The analyst notes the fund's large stake could signal interest from Sardar Biglari to take an activist role. The manager has previously taken hostile roles in other restaurant companies, namely Steak n Shake, successfully turning operations around several times.

West highlighted several potentials which could draw value out of Cracker Barrel:

• push for a sale or lease-back deal (the analyst values Cracker Barrel's property holdings at around $700 million)
  
• slow or stop the building of stores
  
• outsource the retail business, effectively freeing-up $100 million in capital as well as allowing managers to focus solely on running restaurants
  
• take control of seats on the Board

The Stifel analyst also pointed to Biglari's buys just under the $45 level, saying this could provide a floor in the stock price.

Stifel Nicolaus reiterates a Buy rating and $65 price target on Cracker Barrel shares.

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