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Investment Ideas

The table below lists our current Investment Ideas as well as our Watch List – a list of potential ideas that we are in the process of evaluating.  We intend to update this table regularly and will provide detail on any material changes.

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 1

Recent Notes

05/05/14  Monday Mashup: YUM, BOBE and More

05/08/14  Video: Conversation with YUM CFO Pat Grismer

05/12/14  BLMN: Still Bearish

*BOBE Best Ideas Call

Events This Week

05/14/14  KONA Annual General Meeting

05/14/14  DFRG Annual General Meeting

05/15/14  JACK Earnings Call 11:30am EST

05/15/14  BKW Annual General Meeting 9:00am EST

05/15/14  PBPB Annual General Meeting 9:00am EST

05/15/14  CMG Annual General Meeting

05/15/14  YUM Investor & Analyst Conference 12:30pm EST

05/16/14  MCD Investor Meeting 11:00am EST

Chart of the Day

We snagged this from our recent slide deck running through the bull case on BOBE.  The chart pretty much says it all – therein lies a major opportunity.

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 2

Recent News Flow

Monday, May 5th

  • CBRL upgraded to market perform at Raymond James.
  • CMG upgraded to outperform at Raymond James with a $560 PT.
  • DIN Applebee’s unveiled four new dishes (including the New Grilled Vidalia Onion Sirloin), a refreshed beverage line and under 600 calorie lunch combos. 

Tuesday, May 6th

  • BJRI announced its newest restaurant opening in Orlando, FL.

Wednesday, May 7th

  • THI declared a $0.32 dividend payable on June 5,2014 to shareholders as of May 22, 2014.
  • CMG upgraded to buy at Longbow Research with a $641 PT.
  • PZZA upgraded to buy at Feltl and Company.
  • PNRA upgraded to buy at Bank of America Merrill Lynch with a $185 PT.

Thursday, May 8th

  • MCD reported +1.2% global comps in April.  The U.S. business was flat, despite a free coffee promotion and the launch of the Bacon Clubhouse.  APMEA (+2.9%) led the way, while Europe (+0.3) was up modestly.
  • DRI Starboard sent a letter to Darden’s Board urging them to immediately provide notice of a Special Meeting.  In the letter, Starboard called the Board’s “casual and dismissive attitude toward the Special Meeting [disturbing].”
  • SONC upgraded to outperform at Oppenheimer with a $25 PT.

Friday, May 9th

  • BWLD initiated underperform at Buckingham with a $116 PT.

U.S. Macro Consumption

The XLY (-0.6%) underperformed the SPX (-0.1%) last week.  Both casual dining and quick service stocks underperformed the broader XLY index.  The Hedgeye U.S. Consumption Model turned bullish, flashing green on 8 out of 12 metrics.

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 3

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 4

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 5

XLY Quantitative Setup

From a quantitative perspective, the sector remains bearish on an intermediate-term TREND duration.

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 6

Casual Dining Restaurants

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 7

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 8

Quick Service Restaurants

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 20

Monday Mashup: BOBE Replay, JACK Reports on Tuesday - 10

Howard Penney

Managing Director

Fred Masotta

Analyst