Kona Grill (KONA) Has Been Ablaze...Is The Stock Ripe For Takeover?

June 7, 2012 3:52 PM EDT
Kona Grill (Nasdaq: KONA) recently reported a fire at it's Troy, MI location, but a press release from the company, affirmed that there was minor damage and that the small blaze wouldn't materially impact its earnings. Kona reiterated its previously stated Q2 2012 financial guidance of restaurant sales of $24.7 million and net income of $1.25 million, or $0.14 per share. (Consensus is $24.7 mln and $0.15)

Over the past two years, shares of KONA have gone from about $3 to $8, however, the entire market cap of the company is only $74 million. Although, the company only operates 23 restaurants in 16 states, the company is expected to keep expanding...and recently announced a $5 million share buyback.

Also, there has been a lot of recent M&A action in this sector, with the likes of Benihana (Nasdaq: BNHN) and P.F. Chang's (Nasdaq: PFCB) being acquired and taken private.

KONA has reported relatively strong earnings and has a veteran leader in Berke Bakay. Currently the company is in the black, with $95.57 mln in annual sales, with y-o-y qtrly revenue growth up 8.6%.

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