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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: YUM On Deck - chart1

Recent Notes

07/07/14 Monday Mashup: Big Week for BOBE

07/09/14 BOBE: Ugly is Beautiful

07/10/14 PBPB: Staying Short

07/11/14 June: The Ugly Duck of 2Q

Events This Week

07/16/14 YUM earnings release AMC

07/17/14 YUM earnings call 9:15am EST

Chart of the Day

We continue to believe 2Q14 consensus SSS estimates are too aggressive.  Knapp and Black Box 2Q14 SSS estimates came in at -0.9% and +0.3%, respectively.

Monday Mashup: YUM On Deck - chart2

Recent News Flow

Monday, July 7th

  • YUM price target was raised to $94 from $87 at UBS.
  • BOBE issued a response to Sandell's latest release.  In the response, the company highlighted the activist's recent "omissions" and reiterated their commitment to finding a settlement solution.

Tuesday, July 8th

  • BJRI introduced a new Peanut Butter S'mores Pizookie.

Wednesday, July 9th

  • PLKI named Todd Burke as VP of Corporate Communications.  Mr. Burke has held prior roles at JetBlue Airways, Trans World Airlines, American Airlines and, most recently, Pacific Gas & Electric Company.  At Popeyes, Mr. Burke "will lead internal and external communications, and the public and government affairs function."
  • PBPB preannounced disappointing 2Q14 earnings and guided down full year estimates.  You can read more about this in our recent note "PBPB: Staying Short."

Thursday, July 10th

  • COSI appointed new CFO Scott Carlock, who will replace current CFO William Koziel.  Carlock comes over from Yum! Brands where he previously served as an executive, holding various finance and accounting roles over the past 13 years.

Friday, July 11th

  • EAT was downgraded to hold at Wunderlich Securities with a $52 PT.

Sector Performance

The XLY (-1.0%) underperformed the SPX (-0.9%) last week.  Both casual dining and quick service stocks, in aggregate, underperformed the narrower XLY Index, with casual dining being the biggest laggard of the two.

Monday Mashup: YUM On Deck - chart3

Monday Mashup: YUM On Deck - chart4

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