We added CAKE to our Best Ideas list as a high conviction SHORT yesterday.
After being the bull on CAKE for the majority of 2013, we have reversed course and turned bearish heading into the 4Q13 print and throughout 2014 for several reasons including, but not limited to:
- The secular decline of the casual dining industry
- The end of the road for CAKE’s margin story
- Growing complacency on the street
Trading at a peak multiple, we see 20-30% downside to the stock in 2014 as full-year earnings estimates and expectations are revised down.
Click here for the full report: CAKE: BEST IDEA SHORT
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