Howard – YUM - I’m warming up to YUM, but I would really like to get past 4Q08. So far in the 4Q08 we are hearing that sequentially KFC and PH sales trends have slowed, while TB remains more resilient. Over all, the US business is in a secular decline and the international business is having a difficult time making up the difference. Financial engineering is the only way they can get to the EPS guidance.
Keith – SBUX - under $8, I buy the triple shot
Howard – SBUX - As I said in my last SBUX post, I see fundamental support at $7-$8 and that has not changed.
Keith - CAKE - Take your CAKE and eat it too! 6.28 next
Howard – CAKE – CAKE’s real estate strategy over the past 5 years is really hurting them: a mall based concept with a high concentration of stores in FL, AZ and CA. Also management does not give you a warm and fuzzy feeling that they are being proactive about the macro environment.
Keith - WEN starting to show some + divergences, if it holds 3.48, I like it on the long side
Howard - WEN - The Wendy’s concept had a decent same-store sales performance in 3Q08. Management needs to prove the cost cutting/margin story, and that will take time. I have a positive bias, too.
Keith – EAT - has been eaten, looks like it could eat the shorts however if we buy it down at 6.33
Howard – EAT - is the poster child for casual dining. Management is doing everything they can do to offset the macro, including a liquidity event, but who cares. Three of Chili’s competitors in the bar and grill segment are in serious trouble – Applebee’s, O’Charley’s and Ruby Tuesday’s – but who cares.