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.
