Question

Based on all of the Information below, do you predict that Biglari Holdings company's stock will rise or fall in the succeeding week?

Please share observations

BIGLARI HOLDINGS, INC

Biglari Holdings, Inc. (NYSE: BH) closes at $83.18

Federal Reserve said it would buy an additional $33B in bonds to address poorly functioning markets

BH will steadily decline for the next two quarters as JPMorgan Economists expect US GPD to decrease 2% for Q1 and 3% for Q2

ROE closed at 9.34%, not very desirable

Revenue has decreased $141M over the last year, expected from Steak-n-Shake Closures

BIGLARI HOLDINGS INC AT CLOSE 6:30 PM EDT 03/13/20 Volume 1D 5D 1M 3M YTD 1Y 3Y 28,430 $83.18USD $120 9.14 12.34% 65 Day Avg Vol 13,430 $100 1 Day Range AFTER HOURS 4:07 PM EDT 03/13/20 $83.18 0.00 0.00% 73.58 -83.55 $80 AFTER HOURS VOL 85 52 Week Range 71.64 - 165.65 (03/12/20-04/25/19) $60 Jan 20 Feb 20 Mar 20 ADVANCED CHARTING COMPARE Open 78.74 Prior Close 74.04 (03/12/20) 1 Day BH 12.34% DJIA 9.36% Russell 2K 7.77% Leisure/Arts/Hospitality -9.97%

Answer 1

The stock will fall in the coming weeks:

• Weak fundamentals

  • Decline on revenue: Revenue has decreased $141M over the last year, expected from Steak-n-Shake Closures

  • ROE closed at 9.34%, not very desirable

• Semi strong market efficiency:

  • Analysts expectation is decline in the stock prices: BH will steadily decline for the next two quarters as JPMorgan Economists expect US GPD to decrease 2% for Q1 and 3% for Q2

• Macro factor

  • Federal Reserve said it would buy an additional $33B in bonds to address poorly functioning markets

  • This will increase the risk free rate and hence the discount rate for all the stocks and hence the price should fall

All the factors are therefore pointing towards an expected decline in the Biglari Holdings company's stock in the succeeding week.