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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: DRI, SBUX and More - chart1

Recent Notes

06/16/14  Monday Mashup: Long BOBE, Short DFRG

06/16/14  DFRG: Running Through Our Thesis

06/18/14  Restaurant Sector Valuation

06/19/14  DRI: The Big Miss

Events This Week

06/23/14  SONC earnings call 5:00pm EST

06/24/14  Oppenheimer Consumer Conference: JACK, BJRI, DPZ, FRGI

06/25/14  Oppenheimer Consumer Conference: DENN, RUTH, SONC

Chart Of The Day

Monday Mashup: DRI, SBUX and More - chart2

Recent News Flow

Monday, June 16th

  • DFRG announced the opening of a 7,900 square ft. Del Frisco’s Grille in Burlington, MA.
  • BOBE rescheduled its fourth quarter earnings release and conference call to Tuesday, July 8th, 2014, citing material weakness in internal controls. 
  • RRGB Senior VP and Chief Development Officer, Todd A. Brighton, notified the company he will resign from his position effective July 1, 2014.  Mr. Brighton will assist the company in its transition.
  • PLKI announced the completion of its $43 million recipe purchase and the extension of its supply agreement with Diversified Foods and Seasonings, LLC.
  • EAT announced the departure of Board Member John Mims.  Mr. Mims, who elected to resign, joined Brinker’s Board of Directors in 2007.

Tuesday, June 17th

  • PZZA was rated number one in customer satisfaction among limited-service restaurants by the 2014 American Customer Satisfaction Index (ACSI).
  • CAKE announced the opening of its newest Cheesecake Factory restaurant at Lakeside Shopping Center in Metairie, a suburb of New Orleans, making it the company’s first restaurant in Louisiana.

Wednesday, June 18th

  • WEN is bringing back its Pretzel Bacon Cheeseburger and Pretzel Pub Chicken Sandwich beginning in early July.
  • DAVE Lisa A. Kro and Richard L. Monfort resigned as members of Famous Dave’s Board of Directors and audit committee.

Thursday, June 19th

  • THI launched its TimmyMe App for Windows 8 devices which gives guests the ability to scan-to-pay for their in-store purchases.  Tim Hortons’ customers now have this capability across all four major mobile platforms, including BlackBerry10, iOS and Android.
  • BLMN appointed former Executive VP and Chief Resource Officer, David Pace, as the President of Carrabba’s Italian Grill.

Friday, June 20th

  • SBUX is reportedly prepared to raise prices for packaged coffee and other products following price hikes by competitors.

Sector Performance

The XLY (+0.4%) underperformed the SPX (+1.4%) last week.  Both casual dining and quick-service stocks outperformed the narrower XLY index.

Monday Mashup: DRI, SBUX and More - chart3

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U.S. Macro Consumption

The Hedgeye U.S. Consumption Model continues to signal bearish, flashing red on 7 out of 12 metrics.

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XLY Quantitative Setup

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

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Casual Dining Restaurants

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Quick Service Restaurants

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Howard Penney

Managing Director

Fred Masotta