THE HBM: CMG ,GMCR, YUM, DNKN

THE HEDGEYE BREAKFAST MONITOR

 

MACRO NOTES

 

Consumer

 

Initial jobless claims came in at 367k versus 371k consensus and 379k (revised from 377k) the week prior.

 

THE HBM: CMG ,GMCR, YUM, DNKN - initial claims 22

 

 

Comments from CEO Keith McCullough

 

Almost all of the sequential Growth Slowing signals that matter in my model are flashing amber lights now:

  1. CHINA – all of the high-frequency economic data (inflation accel, growth decel) looks primed to slow in FEB as both the Shanghai Comp (+2% last night) and the Hang Seng (+12.5% YTD!) move to immediate-term TRADE overbought signals. Plenty of Johnny come lately pundits, who I didn’t hear a peep from when we bought China in DEC, going bullish.
  2. COPPER – the Doctor finally breaking its most immediate-term price momentum level of support of $3.83/lb this morn at the same time that Singaporean Stocks back off and moved red into the close. Stealth signals, but they’re leading ones that matter in my model. Copper’s long-term TAIL of 3.98/lb resistance intact – lower-highs.
  3. TREASURIES – if you only bet w/ the bond market for the last year on its implied growth slowing/accelerating signals, you’d have not been sucked into any of the lower-highs in US Equities (Feb 2011, Apr 2011, Jan 2012). I bought the long-bond back yesterday as the 10yr yield looks like it wants to make lower-lows for the YTD.

 

I was very bullish until policy infected the growth/inflation signals in my model. I’m data dependent – and the data is now going the wrong way. Jobless claims and the employment report up next.

 

 

SUBSECTOR PERFORMANCE

 

THE HBM: CMG ,GMCR, YUM, DNKN - subsector

 

 

QUICK SERVICE

 

CMG: Chipotle Mexican Grill reported $0.81 EPS for 4Q11 versus $1.83 consensus.  Comps were up +11.1% and January comps were up roughly 10.1%.  The company plans to take price in the Pacific region which should help comps by 1%.

 

CMG: Chipotle Mexican Grill was reiterated Conviction Buy at Goldman Sachs.  The price target was raised from $410 to $425.

 

CMG: The price target for Chipotle was raised from $370 to $450 at Credit Suisse.

 

GMCR: Green Mountain is up ~20% premarket after reporting 1QFY12 EPS of $0.60 versus $0.36 consensus.  FY12 revenue (Sept) was reiterated at +60-65% y/y or $4.24-4.37b versus consensus $4.24b.  K-Cup Packs revenue was $715.7M versus $332.9M year-over-year.

 

YUM: Yum Brands’ Taco Bell is being linked to a salmonella outbreak in Oklahoma, according to media reports.

 

DNKN: Dunkin’ Donuts is adjusting its menu in an effort to make its growth into new markets more successful than previous efforts, according to media reports.  See the article here.

 

 

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

 

COSI: Cosi traded up 14% on accelerating volume as news emerged that Carin Stutz filed a Form 4 on January 31st, buying another 65k shares.

 

 

CASUAL DINING

 

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

 

CHUX, RRGB, BOBE, EAT, TXRH, BWLD: All traded higher on accelerating volume.

 

KONA: Traded down -8% on accelerating volume.

 

THE HBM: CMG ,GMCR, YUM, DNKN - stocks

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst

 


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