THE HBM: DPZ, BWLD, DRI, MRT

THE HEDGEYE BREAKFAST MONITOR

 

MACRO NOTES

 

CPI

 

The Consumer Price Index for November came in at +3.4% y/y versus expectations of +3.5%. CPI Ex Food & Energy came in at +0.2% versus expectations of +0.1%. We will have a post up this morning with more pertinent takeaways.

 

Comments from CEO Keith McCullough

 

Buy low, sell high – I really think that idea could be back in 2012.

  1. GOLD – Most Read on Bloomberg this morning is “Gold Market Rout Leaves Traders Least Bullish in 4 months” – gee, thanks. This is a great contrarian signal when combined w/ my long-term TAIL of support for Gold holding at $1568 (bought it there on 12/14). We’re not free and clear in this position obviously for a while; but getting above $1596 would help – that’s an impt level of immediate-term resistance
  2. INDIA – good news in Asia overnight was that China stopped going down for a day (+2%); bad news is that the Shanghai Comp remains in crash mode and the Sensex in India continues to crash (down another -2.2% overnight, taking YTD crash to -24.5%); Brent Oil at $115/barrel in November did not help India
  3. GERMANY – Commerzbank and Deutsche Bank solvency problems finally becoming understood; this should help the Street recognize why the Germans will take care of the German banks before they do French ones. As we’ve outlined in our European bank slide presentation for the last 6 months, the list of insolvent European banks is long and the mechanism to bail the list out is not in place. New DAX range = 5 (bearish)

 

SP500 holding 1206 is constructive. Strong Dollar = Strong American Consumption and Employment.

KM

 

 

SUBSECTOR PERFORMANCE

 

THE HBM: DPZ, BWLD, DRI, MRT - subsector fbr

 

 

QUICK SERVICE

 

DPZ: The Al Jammaz family, owners of Domino’s Pizza operator, Alamar Foods, which operates Wendy’s and Domino’s Pizza restaurants in the Middle East, sold a 42% stake in Alamar to The Carlyle Group. 

 

 

CASUAL DINING

 

BWLD: Buffalo Wild Wings was raised to “Buy” at Miller Tabak & Co.  The twelve month price target is $78.  We have not seen the report but have strong conviction that this stock will underperform over the next couple of quarters.  We believe there is downside to $45.

 

DRI: Darden Restaurants reported 2QFY12 EPS of $0.41, as previously announced on December 6th. 

 

MRT: Morton’s Restaurant Group is being bought by Tilman Fertitta, owner of Landry’s Restaurants Inc. in a deal that values the steak-house company at $117 million or $6.90 per share.

 

THE HBM: DPZ, BWLD, DRI, MRT - stocks 1216

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst

 


Today 12PM ET: LIVE Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more