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Follow Biglari Into the Middle East

Biglari's other brand is Western Sizzlin'. There were 84 Western Sizzlin' locations at the end of the fiscal year. Unlike Steak' 'n Shake, Western Sizzlin' has the majority of its locations franchised, with only three locations owned by the company. With Biglari's increasing presence in Europe and the Middle East, Western Sizzlin' could see strong expansion with existing franchise partners.

Beyond the company's own brands is a partial ownership stake in restaurant chain Cracker Barrel (CBRL) The ownership of 20% of Cracker Barrel shares has been in the news several times as Biglari's CEO Sardar Biglari continues to fight Cracker Barrel management for a $20 special dividend and a spot on the board.

Biglari has been unsuccessful in this fight and as recently as last week received an offer from Cracker Barrel to buy out his stake. Although I don't believe Biglari will sell soon or give up his fight, investors should be happy as they have been pleasantly rewarded. Biglari Holdings paid $241 million for its 20% stake in Cracker Barrel. At the end of the 2013 fiscal year, that stake was worth $485. Along the way, Biglari has also collected $18.4 million in dividends.

Biglari's earnings are also complicated as they can only recognize what is paid out in dividends by several of its investments. In 2013, Steak 'n Shake had earnings of $28.4 million, while Western Sizzlin' represented only $511,000. The Lion Fund, which includes several investments, had earnings of $128.2 million, representing the majority of the company's fiscal earnings.

Biglari Holdings has a complicated ownership structure with assets shifted between the company and holding companies such as The Lion Fund I & II. However, past all of the structure is great growth and asset value that investors might be undervaluing.

Shares of the company trade in the triple digits, but there is a limited number of shares outstanding. This company, valued at less than $1 billion, should see steady growth with its continued Cracker Barrel fight and the expansion of its own brands, particularly in the Middle East.

Biglari's shares were recently trading at $506.62.

At the time of publication, the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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