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Takeaway: Hedgeye's restaurant sector team likes Burger King Worldwide ($BKW) on the short side.

Hedgeye's restaurant sector team is bearish on the stock of Burger King Worldwide ($BKW) on all three TRADE, TREND and TAIL durations. Our analysts cite the following reasons:

  • The company simply might be too big to fix. It has been dogged with a number of issues for the past decade, and our analyst remain skeptical that those issues have been resolved conclusively.
  • There appears to be little cash flow for the franchisee to reinvest in his/her own business.
  • Probable higher beef prices over the next few years due to supply issues.
  • Obamacare could add financial strain.
  • McDonald's ($MCD)  is aggressively protecting its market share.

Here's our quantitative setup (see chart below) on BKW on a TRADE duration.

BKW: Bearish on the King - bkw