THE HEDGEYE BREAKFAST MONITOR
MACRO NOTES
Comments from CEO Keith McCullough
Two of the Top 3 Most Read (Bloomberg consensus) still staring at the tree (Greece) – meanwhile the rest of the world doesn’t cease to exist:
- SINGAPORE – when the Prime Minister of Singapore warned of a “rough landing” in China last wk, our research team was buzzing about it – they should have been; Singapore is a leading indicator for Global Growth – and Singapore’s Exports for JAN just dropped to negative y/y! (-2.1% vs +9.0% DEC). Chinese Growth is slowing – I sold my China Equities (CAF) long (bought it in DEC) yesterday
- OIL – never has Oil trading > $100/barrel not slowed both US and Global Consumption Growth. Maybe this time is different. Maybe it isn’t. Brent Oil busting to new highs this morning on a weak US Dollar and institutional performance chasing squarely focused on buying inflation protection.
- JAPANESE YEN – biggest currency drop not discussed by consensus media, maybe ever – and ever, as you know, is a long time. The Yen is literally straight down for the month of FEB. Down 4% is a monster move for a major currency. I think this is front-running the Sovereign Debt Maturity spike that’s pending in March. When I was saying this about the Euro breaking down hard in April 2011, that was the early signal too…
Covered SPY short at 1341, and re-shorted it into yesterday’s close. I think we keep making lower long-term highs vs 1363.
KM
SUBSECTOR PERFORMANCE
QUICK SERVICE
GMCR: Green Mountain Coffee was raised to “Buy” at Dougherty & Co. The twelve month price target is $80 per share.
NOTABLE PERFORMANCE ON ACCELERATING VOLUME:
COSI: Cosi declined 2.9% on accelerating volume yesterday.
CASUAL DINING
PFCB: P.F. Chang’s was upgraded to Outperform by RBC. The price target was raised from $37 to $45.
KONA/PFCB: Kona COO Larry Ryback has resigned from the company and will leave by March 2012 to take up the post of COO of P.F. Chang’s Bistro division.
BJRI: BJ’s restaurants reported EPS of $0.34 versus consensus $0.32. Comparable sales for 4Q11 increased 5.1%.
DRI: Darden was reiterated “Buy” at UBS.
NOTABLE PERFORMANCE ON ACCELERATING VOLUME:
TXRH, PFCB, DRI, EAT, CBRL, & DIN: All gained on accelerating volume yesterday. PFCB traded at 4.5x average volume following earnings. We are bullish on the stock.
Howard Penney
Managing Director
Rory Green
Analyst
