Biglari Holdings Inc.

Where It Passes

Where It Falls Short

• Valuation0% pass✗ 28▾

  All 13 investors flag BH-A's valuation

  Price / 3-yr avg EPS168.4x

  ✗Graham<= 15x

  Price-to-Book Ratio

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-0.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-0.7%, ROC=-1.7%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)

  ✗Dreman< 8x

  Price / Book Value per Share

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation Reasonableness

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=6.4%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical Average

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-1022.5% (IV=$160.90 vs Price=$1806.09)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low164% of trailing low ($1099.99)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-1.97%; #3552/6340 (top 56.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.4988; #2894/6449 (top 44.9%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.3505; #3116/5247 (top 59.4%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+2.08%; #2245/4519 (top 49.7%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+21.25%; #1288/6202 (top 20.8%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models0% pass✗ 3▾

  BH-A overvalued: all 3 models price fair value below $1806.09 (median $124.65)

  Dreman fair value$160.90

  ✗Dreman-1022.5% margin vs $1806.09

  Marks fair value$124.65

  ✗Marks-1348.9% margin vs $1806.09

  Templeton fair value$109.74

  ✗Templeton-1545.8% margin vs $1806.09
• Profitability6% pass✓ 3✗ 32▾

  15 of 16 flag BH-A's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)3/11 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)6/11 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)0.3%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)4.8% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-27.1M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)15.07

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-3.9%

  ✗Lynch> 15%

  EBIT / Enterprise Value-0.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-0.7%, ROC=-1.7%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-3.66%

  ✗PiotroskiROA > 0

  ROA Change YoY-0.43% -> -3.66% (delta: -3.22%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=10.43%, ROA=-3.66%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY60.4% -> 59.2%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-7.2%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-3.9%

  ✗Dreman> 12%

  Margin of Safety

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity0.5% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-1022.5% (IV=$160.90 vs Price=$1806.09)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency6/10 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue4.8%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-3.9%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend11.8% (2023) -> 4.8% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 62.2% -> 59.2%, operating margin 11.8% -> 4.8%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-1.97%; #3552/6340 (top 56.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+22.81%; #1865/3702 (top 50.4%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-3.94%; #3156/5226 (top 60.4%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0412; #2322/5884 (top 39.5%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR9.5% over 4 years

  ✓Neff7%-20% annualized

  Positive Diluted-EPS Years3/7 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth13% pass✓ 3✗ 10▾

  7 of 8 flag BH-A's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 4.2% vs Rev: 8.1%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction$131.64 (2019) -> $-143.86 (2025)

  ✗DremanPositive over recent years

  EPS CAGR9.5% CAGR over 4 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency6/10 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-0.8%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency2/5 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 62.2% -> 59.2%, operating margin 11.8% -> 4.8%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR-1.8%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR9.5% over 4 years

  ✓Neff7%-20% annualized
• Verdicts13% pass✓ 2✗ 14▾

  Split decision: 13 FAIL · 2 PASS · 1 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (3/9)✗BuffettFAIL (1/9)✗LynchFAIL (2/7)✗GreenblattRank #1864✗PiotroskiFAIL (F-Score 3)✓DremanPASS (5/11)✓MungerPASS (2/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (1/5)✗AckmanFAIL (2/9)✗TempletonFAIL (3/8)✗SleepFAIL (2/6)✗AsnessFAIL (Rank #1257/2370 (Top 53.0%))✗NeffFAIL (2/6)✗SchlossFAIL (3/7)•OshaughnessyNEUTRAL (Not ranked)
• Efficiency25% pass✓ 3✗ 8▾

  6 of 8 flag BH-A's efficiency — Buffett, Greenblatt, Piotroski +3 more

  Current Ratio3.41

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)4.4%

  ✗Buffett> 10%

  ROIC - WACC-5.6%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-1.7%

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.16 -> 2.43

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.42x -> 0.39x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities3.41

  ✓Dreman> 1.5

  Return on Invested Capital1.9%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=5.7%; FY2024: ROIC=4.2%; FY2025: ROIC=1.9%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 1.9%)

  ✗SleepROIC > 12% in a majority of years
• Cash Flow40% pass✓ 5✗ 7▾

  6 of 10 flag BH-A's cash flow — Buffett, Lynch, Dreman +3 more

  Free Cash Flow Proxy$-27.1M

  ✗BuffettPositive and growing

  FCF Positive and Growing$24.8M

  ✗LynchPositive and growing

  Operating Cash Flow$107.0M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=10.43%, ROA=-3.66%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=6.4%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive8/8 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency8/8 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$24.8M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+2.08%; #2245/4519 (top 49.7%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Debt & Leverage50% pass✓ 9✗ 6▾

  6 of 12 pass — Buffett, Lynch, Piotroski +3 more object

  Debt Levels0.36

  ✓MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  LT Debt vs Net Current AssetsLT Debt $209.3M vs NCA $291.0M

  ✓GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.36, IC: -0.4x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.36

  ✗Lynch< 0.33

  Cash - Long-term Debt$4.0M

  ✓LynchPositive preferred

  LT Debt / Total Assets Change1.15% -> 20.86%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities3.41

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.36

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Interest Coverage & Debt/EBITDAIC=-0.4x, D/EBITDA=6.4x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.36

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.3617; #2158/4210 (top 51.3%)

  ✗AsnessTop 30% of eligible cross-section