Investment Q&A

SG is a salad restaurant company, market cap $2.6B after the stock has risen 108% this year. It is growing fast and the balance sheet is strong, but it is not yet profitable. But cash flow did turn positive last year. Sales beat estimates by 3% last quarter. It just boosted guidance, indicating same-store sales growth should be 6%. It is opening new stores fairly rapidly. Higher-priced salads are helping sales. Insiders own 10%. It looks quite interesting for a small cap. However, the US restaurant sector can be very fickle. Typically, investors pile into a growth story like this, but then all exit at the same time if there is any hint of slowing growth. SG went public at $28 in 2021, so is only really just getting back towards that level now. We want to like it, but caution is keeping our enthusiasm limited. MDNA: we do not know this one well. It was a tiny company late last year before surging 559% (!) so far this year. It has $41M cash, but no revenue, losses and negative cash flow (-$14M in the past 12 months). Losses are expected to continue. It is working on central nervous disorders and urological cancer treatments. Recent good clinical results and a $20M investment from RA Cap Management have caused a lot of excitement. However, its trials are still early stage (Phase I/II) and a lot of time and money will still be needed here to get a product to market. Certainly there is potential, and so far so good, but we can't endorse it due to the level of risk here.