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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 watching closely.  We intend to update this table regularly and will provide detail on any material changes.

Monday Mashup: BKW, BWLD and More - 8 25 2014 11 15 32 AM

We are bumping up SBUX and EAT to our Short List.  More details to follow.

Recent Notes

08/20/14 Expert Call: Coffee Prices May Move Much Higher From Here

Events This Week

Tuesday, August 26th

  • COSI Annual General Meeting

Wednesday, August 27th

  • BOBE Earnings Call 10am EST

Thursday, August 28th

  • ZOES Earnings Call 5pm EST

Chart of the Day

Coffee prices are up 55.5% YTD and 46% YoY.

Monday Mashup: BKW, BWLD and More - chart2

Recent News Flow


  • BKW is in talks to acquire THI for tax inversion purposes.  The merged companies would be headquartered in Canada.
  • TXRH was upgraded to overweight at Stephens with a $32 PT.
  • BWLD takes a majority stake in Rusty Taco, a taco chain that currently has nine locations across Dallas, Denver and Minnesota.

Monday, August 18th

  • DIN Applebee's introduced crosscut ribs in 3 different sauces: Sweet Asian Chile, Smoky Chipotle and Classic BBQ.
  • BWLD is offering Fantasy Football draft parties, which include an exclusive Pepsi Fantasy Football Draft Party Kit that provides guests with a draft board, player stickers, a brag flag and other items.
  • RRGB appointed Jeff Melnick as Senior VP of Operations.  Melnick has served as regional VP of Operations for Red Robin since 2006 and will now oversee the operations of over 380 domestic company owned restaurants.

Tuesday, August 19th

  • EAT was upgraded to buy at Wunderlich Securities with a $55 PT.
  • THI announced the return of "Pumpkin Pie Goodness."  Tim Hortons' restaurants are now offering the Pumpkin Pie Iced Capp and Pumpkin Pie Latte in all U.S. restaurants.

Wednesday, August 20th

  • IRG appointed Shauna King to its board of directors.  Ms. King currently serves as VP, Finance and Business Operations for Yale University, where she has worked since 2006.  Ms. King has already held various leadership roles at PepsiCo and Frito-Lay.
  • BOBE Activist Sandell Asset Management announced it had won at least five seats on the Board of Bob Evans.
  • BOBE declared a $0.31 quarterly dividend and increased its current share repurchase authorization to $150 million.

Thursday, August 21st

  • CAKE was downgraded to underperform at Bank of America Merrill Lynch with a $42 PT.
  • PLKI named William Matt its new CFO.  Mr. Matt most recently served as COO of La Senza Global and has held prior positions at Victoria Secret Direct and PepsiCo/KFC.
  • BWLD announced the opening of its second PizzaRev franchise restaurant in Edina, MN.
  • WEN announced its latest premium offering, the new Smoked Gouda Chicken on Brioche.
  • EAT increased its quarterly dividend $0.04 to $0.28 and its board authorized another $350 million in share repurchases.

Friday, August 22nd

  • TXRH announced a $0.15 quarterly dividend which will be paid on October 3, 2014.
  • TAST Carrols Restaurant Group agreed to purchase 64 Burger King restaurants from Heartland Food LLC for approximately $18.0 million.

Sector Performance

The XLY (+2.3%) outperformed the SPX (+1.7%).  In aggregate, both casual dining and quick service stocks underperformed the narrower XLY Index.

Monday Mashup: BKW, BWLD and More - chart3

Monday Mashup: BKW, BWLD and More - chart4

XLY Quantitative Setup

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

Monday Mashup: BKW, BWLD and More - chart5

Casual Dining Restaurants

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Monday Mashup: BKW, BWLD and More - chart7

Quick Service Restaurants

Monday Mashup: BKW, BWLD and More - chart8

Monday Mashup: BKW, BWLD and More - chart9

Howard Penney

Managing Director

Fred Masotta