This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

November 6, 2008 - Monro Muffler Brake, Inc. (MNRO-NASDAQ) provides automotive undercar repair and tire services. It offers a range of services on passenger cars, light trucks, and vans for brakes, mufflers and exhaust systems; and steering, drive train, suspension, and wheel alignment, as well as provides other products and services, including tires and maintenance services.

As of March 29, 2008, it operated 720 company-owned and 14 dealer-operated stores in New York, Pennsylvania, Ohio, Connecticut, Massachusetts, West Virginia, Virginia, Maryland, Vermont, New Hampshire, New Jersey, North Carolina, South Carolina, Indiana, Rhode Island, Delaware, and Maine under the Monro Muffler Brake & Service, Tread Quarters Discount Tire, and Mr. Tire names. The company was founded in 1957 and is headquartered in Rochester, New York.

Monro just posted a quarterly profit that beat Wall Street estimates, helped by higher pricing and a tighter credit environment, and raised its 2009 profit outlook. For the second quarter ended Sept 27, net income was $7.7million, or 38 cents a share, compared with $6.5 million, or 29 cents a share, a year ago. Revenue rose 7 percent to $119.9 million.

Analysts on average expected earnings of 37 cents a share, before special items. Two analysts were expecting revenue of $117.7 million, according to Reuters Estimates.

The company benefitted from customers opting to repair their existing vehicles rather than buy new ones in light of a tight credit environment.

Monro sees third-quarter earnings to be between 27 cents and 29 cents a share. Analysts expect 27 cents. For 2009, the company sees earnings of $1.14 to $1.19 a share on revenue of $460 million to $465 million. Monro previously forecast 2009 earnings of $1.10 to $1.18 a share on revenue of $455 to $465 million. Analysts were looking for earnings of $1.17 a share, before special items, on revenue of $463.1 million.

Monro delivered increasing earnings every year, beginning in 2000, with the exception of 2006 when they dipped to 97 cents a share from $1.01 in 2005. Now it seems to be back on the higher earnings track. Institutional investors think so anyway. In the second quarter of this year, 55 of them bought the stock while only 29 sold it. That compares to 40 which bought it in the first quarter of this year and 40 sold it.

But a little troubling are the last 10 transactions from insiders, including the Chairman, CEO and President Robert Gross. Over the last 2 weeks, he and a director have sold a total of more than 250,000 shares. While Mr. Gross exercised an option and bought 450,000 shares (at $3.47 a share), it might be a signal that management isn't as positive on the future as it has been. The key to knowing whether these sales are meaningful can only be determined by monitoring the Insider transactions to find out if more happen in the near future.

Numbers: Price to sales is .90 with Price to Book at 2.17. Operating margin was 8.44% in the last 12 months with Profit margin at 4.94%. Return on Equity was 11.13%. Debt to Equity is .522 with a Current ratio of 1.418. Book Value is $9.40. Beta is .64. The high for the stock in the last 52 weeks was hit on September 18 when it traded at $26.20. The low was set on March 17 at $14.70. There are 20.23 million shares outstanding with a float of 17.66 million. Insiders own 12.84% of the stock. There's a dividend of 24 cents for a yield of 1.1%.

Monro is a well run company that has decent Return on Equity and increasing earnings. It's small and didn't escape the downward draft when the market pulled all stocks lower this year. But with a current economic environment that will keep drivers on the road with their old cars, it's a company that should benefit where most others won't.

- Company Web site: www.monro.com

- Ted Allrich