New Best Idea: Short DFRG

We are adding SHORT Del Frisco’s Restaurant Group (DFRG) to our Hedgeye Best Ideas list.

 

DFRG develops, owns and operates three fine dining restaurants: Del Frisco’s Double Eagle Steak House, Sullivan’s Steakhouse, and Del Frisco’s Grille.  The full-service steakhouse company currently operates 40 restaurants in 20 states and primarily caters to the high end consumer.  The stock is up 36.8% over the last 6 months.

 

DFRG is a high-conviction short given slowing trends, concerns over the core business, rising commodity costs, positive sentiment, valuation, and more.  Our sum-of-the-parts analysis suggests significant downside.

 

We will hold a conference call Thursday, June 12th at 11am EST to discuss the key points of our thesis and field questions.  Hedgeye Restaurants subscribers will receive both the report and conference call dial-in information on Thursday morning.

For more details email

Howard Penney

Managing Director

Fred Masotta

Analyst