Notable news items over the past few days and price action from Friday.

  • MCD may raise prices at its China outlets in the second half of the year, according to Tim Fenton, President for Asia, the Middle East and Africa.
  • MCD is being sued in the U.S. by a woman claiming that she was injured after chewing on a “large shard of glass” inside her spicy McChicken sandwich.
  • SBUX said on Sunday that it plans to announce a new product for the single serve market “in the near future.  I posted a note last night detailing my take on Starbucks’ direction.  My “coffee” strategy remains to be long SBUX and PEET and short GMCR.
  • I also posted a note last night titled, “THEY SEE INFLATION” on the news that SYY has raised prices as inflation takes hold.  The company's announcement cited produce shortages as being a major headwind.  This is acutely relevant for restaurant companies with high levels of exposure such as CMG.
  • PNRA outperformed the restaurant space, albeit on slowing volume, following the company’s 4Q earnings call during which they outlined guidance in excess of Street expectations.
  • COSI gained on accelerating volume, its share prices closed up 6.2%. 
  • CMG also saw its shares rise following 4Q earnings.  Despite management’s cautious outlook and the company’s vulnerable position from a commodity exposure perspective, the stock’s initial reaction was positive.
  • KONA and CPKI gained on strong earnings results.  Casual dining stocks generally gained on Friday, with the exception of MRT and CAKE. 
  • CAKE reported a low-quality earnings beat on Thursday after market close. 




Howard Penney

Managing Director

Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

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7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

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Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

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GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

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Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

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Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

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Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

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People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

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UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

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Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

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An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

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