Monday Mashup: DFRG, CAKE, PNRA

Investment Ideas

The table below lists our 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: DFRG, CAKE, PNRA - 111


DFRG We’ve recently added Del Frisco’s Restaurant Group to our Best Ideas list as a short.  We’re hosting a call on Thursday at 11am EST to run through our thesis and field questions.

PNRA We’ve removed Panera Bread Company from our Best Ideas list as a short.

CAKE We’ve removed The Cheesecake Factory from our Best Ideas list as a short.

Recent Notes

06/02/14  Monday Mashup: PLKI, BNNY and More

06/03/14  KKD: Concerns Are Overdone

06/05/14  New Best Idea: Short DFRG

06/06/14  Employment Data Mixed

06/09/14  CAKE: Closing Best Idea Short

06/09/14  PNRA: Closing Best Idea Short

Events This Week

06/09/14  MCD May 2014 Sales and Revenue Release

06/10/14  William Blair Growth Stock Conference: SONC

06/10/14  Piper Jaffray Consumer Conference: CAKE, RUTH, IRG, NDLS, BAGL, FRGI, ZOES

06/11/14  William Blair Growth Stock Conference: BNNY, CMG, SBUX, PBPB

06/11/14  Piper Jaffray Consumer Conference: BBRG, SONC, PLKI, DFRG, DEN

06/12/14  DFRG Hedgeye Best Idea Short Conference Call

06/12/14  William Blair Growth Stock Conference: ZOES, FRSH

06/12/14  TAST Annual General Meeting

Chart of the Day

Del Frisco’s Restaurant Group (DFRG) We continue to believe this stock is disconnected from the fundamentals and have recently added it to our Best Ideas list as a short. 


Monday Mashup: DFRG, CAKE, PNRA - 222

Recent News Flow

Monday, June 2nd

  • DENN celebrated 25 years in Puerto Rico and announced plans for its 13th local restaurant that is set to open in Aguadilla in early 2015.
  • DRI Starboard delivered a letter to Darden condemning the Board and withdrawing their request for a Special Meeting.  Starboard remains committed to replacing a majority of the Board.

Tuesday, June 3rd

  • DIN In a move expected to bring 250 jobs to the Guam economy, IHOP signed an agreement with Pacific Pancakes, LLC, to open three restaurants on the Island by 2018. 
  • WEN announced the hiring of Liliana Esposito to Chief Communications Officer.  Esposito previously served as VP, Corporate Communications and Public Affairs, at Dean Foods.

Wednesday, June 4th

  • RT Longbow Research reiterated its buy rating with a $10 PT, citing improving same-store sales driven by improved menu offerings and store designs.
  • WEN introduced a new LTO – the Strawberry Fields Chicken Salad.  According to the company, the new salad “serves up hand-sliced California strawberries, savory Applewood Smoked bacon, crumbled blue cheese and freshly slice red onion in every forkful.”  The salad has a suggested price of $4.49 and $6.49 for the half-size and full-size, respectively.
  • DNKN announced it surpassed one million DD Perks Reward Program members after launching nationwide earlier this year.

Thursday, June 5th

  • PNRA announced 100% franchise commitment to Panera 2.0.  The full 2.0 system is expected to be rolled out to approximately 100 cafes by year end.  Panera also announced a new three-year, $600M share repurchase program.
  • CAKE announced the opening of its newest restaurant in Lenox Square Atlanta.  The restaurant is approximately 8,700 square feet in size and accommodates 215 guests.

Friday, June 6th

  • DFRG Buckingham Research initiated coverage of Del Frisco’s with a buy rating and $35 PT.

US Macro Consumption

The XLY (+1.9%) outperformed the SPX (+1.3%) last week, as both casual dining and quick service stocks outperformed the narrower XLY index.


Monday Mashup: DFRG, CAKE, PNRA - 333

Monday Mashup: DFRG, CAKE, PNRA - 444

XLY Quantitative Setup

Monday Mashup: DFRG, CAKE, PNRA - 555

Casual Dining Restaurants

Monday Mashup: DFRG, CAKE, PNRA - 666

Monday Mashup: DFRG, CAKE, PNRA - 777

Quick Service Restaurants

Monday Mashup: DFRG, CAKE, PNRA - 888

Monday Mashup: DFRG, CAKE, PNRA - 999


Howard Penney

Managing Director


Fred Masotta


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