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Notable news items/price action over the past twenty-four hours.

  • WEN held their analyst day yesterday and, as my note published this morning details, I viewed the meeting as positive for the long term prospects of the stock which I continue to view as being undervalued
  • COSI has traded poorly this week but gained 5.4%, albeit on slowing volume.  I continue to like this turnaround story.
  • GMCR and CBOU declined on accelerating volume; coffee prices are posing a significant headwind for coffee companies and SBUX is growing market share.
  • SBUX downgraded at McAdams Wright Ragen.
  • EAT gained on accelerating volume.  This stock has performed strongly of late, even given the slowdown in Q4 for casual dining, and I continue to like the name as management executes on margin enhancing initiatives and sales driving catalysts come through over the next few months.
  • EAT was upgraded by Morgan Stanley this morning from “underweight” to “equal weight”.  Target increased to $26 from $18.
  • YUM’s Taco Bell chain is launching an ad campaign to fight back against a lawsuit over the quality of its beef taco filling.
  • YUM’s CDS spreads have blown out recently and this is due to rising food prices and the resulting riots in developing nations, according to Bloomberg.  General Mills, Darden Restaurants, and Campbell Soup Co. are other names named in the article.
  • MCD promoted Kevin Newell to the global chief brand officer role. 
  • The U.S. cattle herd probably shrunk to the smallest size since 1958 and the drop in beef supplies may boost prices to a record, analysts said. Ranchers held 92.211m head of cattle as of Jan. 1, down 1.6% Y/y, according to average estimate of 7 analysts  That would be the smallest herd in 53 years, said Ron Plain, livestock economist at the University of Missouri in Columbia.


Howard Penney

Managing Director