FATBB - FAT Brands: Fast Expansion Results In Mounting Debt

2024-01-29 19:25:32 ET

Summary

• Fat Brands' stock has seen a 22% increase in 2023 and a strong start in 2024 due to factors like fast expansion, positive revenue outlook, improving profits, and high dividends.
• However, the expansion has come at the cost. An exceptional debt increase and the resulting ballooning in interest expenses has expanded net losses significantly.
• The company's continued dividend payouts despite losses, its legal troubles and shareholder discontent also make it a risky stock to hold in the portfolio right now.

Despite seesaw price movements in 2023, the restaurant chain owner Fat Brands ( FAT ), is still wound up 22% higher by the end of the year. 2024 has started on an even better note, with a year-to-date [YTD] price rise equivalent to that seen for the full year 2023 (see chart below)....

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