THE HBM: MCD, SBUX, BKC, THI, WEN, PFCB

04/04/12 10:02AM EDT

THE HEDGEYE BREAKFAST MONITOR

Hedgeye Restaurants Alpha – our best fundamental ideas

LONGS: SBUX, PFCB, EAT, YUM

SHORTS: DNKN, BWLD, WEN

 

RESTAURANT STOCKS IN THE HEDGEYE VIRTUAL PORTFOLIO

LONGS: PFCB, EAT, JACK, SBUX

SHORTS: MCD

 

MACRO NOTES

Commentary from CEO Keith McCullough

Oh how quickly the game changes when economic gravity is introduced:

  1. JAPAN – top question from clients is when does the sov debt crisis in Japan find its way into equities. Answer: after currencies. The Nikkei finally snapped its immediate-term TRADE line of 10,105 support last night, trading down a stiff -2.3%, taking its correction to -4% from its March high (to put the asymmetry of the SP500 in context, the US has only had 1 down day of more than -0.7% YTD).
  2. GERMANY – first immediate-term TRADE line break in the DAX too (line was 6998), and the correction in German Equities is now -3.8% from the YTD peak (so keep that in mind w/ the SP500 only -0.4% from its YTD no-volume high). German economic data, like the rest of the world’s, has slowed sequentially in the last 6 weeks.
  3. US DOLLAR – Bernanke’s Bubbles are vast. All we need to see is the confluence of UST yields rising alongside the USD and Gold will come down in a hurry. Intense selling in the last 48hrs in Gold and Silver. Bernanke’s War is on. Remember, we’re explicitly fighting the Fed having a 0% asset allocation to Commodities and Treasuries right now.

Watch 1407 on the SPX. That line breaks and 1388 is next support.

KM

SUBSECTOR PERFORMANCE

THE HBM: MCD, SBUX, BKC, THI, WEN, PFCB - subsector

 

QUICK SERVICE

MCD: McDonald’s was removed from the Conviction Buy list at Goldman Sachs.  It remains rated Buy.

BUX: Starbucks was added to the Conviction Buy list at Goldman Sachs.

BKC: Burger King is coming public again.  Burger King will sell a 29% or $1.4 billion stake to Ackman via Justice Holdings, a UK investment vehicle.  The company says its international growth plans will benefit from better visibility as a public company.  It expects its shares to be relisted on the NYSE within 3 months.

THI: Tim Hortons was downgraded to Neutral from Buy at Goldman Sachs.

WEN: Wendy’s is meeting with lenders in New York tomorrow to discuss $1.325 billion in loans the company is seeking to refinance debt.  The financing will include a $1.125 billion term loan B maturing in seven years and a $200 million revolving line of credit due in five years.

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

GMCR: Green Mountain declined 2.2% on accelerating volume.

CASUAL DINING

PFCB: P.F. Chang’s on Monday revealed its faster service, lower-priced Pei Wei Asian Market, a fast-casual spin-off of its 173-unit Pei Wei Asian Diner concept.

 

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

KONA: Kona Grill gained 7.1% on accelerating volume.

PFCB: P.F. Chang’s gained 2% on accelerating volume.

THE HBM: MCD, SBUX, BKC, THI, WEN, PFCB - stocks

Howard Penney

Managing Director

Rory Green

Analyst

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