THE HBM: GMCR, DNKN, EAT

THE HEDGEYE BREAKFAST MONITOR

 

MACRO NOTES

 

Comments from CEO Keith McCullough

 

Sold SPY yesterday at 1249 resistance and got hedged, fast. That’s the only way to play the game that’s in front of you right now.

  1. CHINA – apparently not getting the Santa Claus rally memo from the US centric perma bulls; Chinese stocks down for the 5th consecutive day, down another -0.89% to fresh 3yr lows, and back in crash mode (down -20.7% YTD) as China’s Money Supply (M2) gets reported at the lowest level since May of 2001! (12.7%)
  2. KING DOLLAR – remains our Hedgeye Macro Theme #1 for Q411 and I’m sticking to it. Get the EUR/USD right and you’ll get most other things that are extremely correlated right. All of Asia and Latin America in rate cutting mode; Europeans getting bazooka’d.
  3. CORRELATION CRASH – remains my Hedgeye Macro Theme #2 for Q411 as it’s born out of Theme #1. Gold is doing what it did when my correlation risk model blew out in Q4 of 2008. This morning’s immediate-term TRADE correlation (inverse) b/t USD and Gold = -0.84% and commodities like Corn are looking like the Euro.

 

Keep moving out there. Risk is.

 

KM

 

 

SUBSECTOR PERFORMANCE

 

THE HBM: GMCR, DNKN, EAT - subsector fbr

 

 

QUICK SERVICE

 

GMCR: Green Mountain Coffee Roasters is seeing a deceleration in shipments of Keurig brewers, according to Stifel Nicolaus.

 

GMCR: Green Mountain Coffee Roasters was cut to Neutral versus Buy at Dougherty.

 

GMCR: Janney analyst Mitch Penheiro was quoted by Bloomberg as saying that the drop in IRI K-Cup share for GMCR is “irrelevant” because the company has 100% market share of the K-Cup category.  The market clearly does not think that the IRI data was irrelevant as we head into 2012, the year when the company loses its K-Cup patent.  GMCR traded down -11.6% on 1,177% volume versus the 30 day average.

 

DNKN: Dunkin’ Brands’ largest three investors have recently unloaded a total of $546.6 million in shares of the company.  TCG, Bain, and Thomas H. Lee sold $175.6 million, $191.4 million, and $179.6 million worth of shares, respectively.


 

CASUAL DINING

 

EAT: Brinker was up yesterday on accelerating volume.  Dine Equity was down on strong volume.  Of late, the divergence between the two share prices has been stark with Brinker's stock outperforming.

 

 

THE HBM: GMCR, DNKN, EAT - stocks 1214

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst

 


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