SwingTrade Member Forum

[MikeDDKing]

NROM is one of my favorites that I believe has good odds of doubling in 2013. NROM is a franchisor of pizza stores in a variety of different formats. There are five parts to the investment thesis:

1. The Take-N-Bake grocery store business should continue to grow and be a driver for earnings. The grocery store locations grew 22% in Q4'12 vs. Q4'11 and I expect similar or even better growth going forward.

2. The Take-N-Bake stand alone store is another great revenue and earnings driver. The initial store was profitable in the first month which is highly unusual. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82610505 They have three locations operating now with eight more in the works. I expect that many additional locations above and beyond the initial eight will be announced in 2013 as they have a target of 20-30 additional locations in 2013. Each locations is expecte to generate annual revenue of $48-72K/year plus $18K for the iniitial license fee. In addition to top and bottom line benefits of the stand alone Take-N-Bake, I think it will help to expand the multiple as it is a great new concept that will give the stock some buzz.

3. The Take-N-Bake stand alone stores are eligible for food stamps. With roughly 1 in 7 Americans on food stamps, this gives them a big benefit vs. most restaurants.

4. They should receive a nice amount of money from their litigation which is expected to be resolved shortly. This lawsuit is expected to add several million dollars in cash to the balance sheet.

5. They expect expenses to remain flat going forward. Since their business is a licensing/royalty model, revenue drops rapidly to the bottom line.