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Investment Ideas

The table below lists our Investment Ideas as well as our Bench -- a list of potential ideas we are watching closely.  We intend to update this table regularly and will provide detail on any material changes.

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Recent Notes

08/25/14 Monday Mashup: BKW, BWLD and More

08/26/14 Expert Call: Coffee Outlook in 2015 and Beyond

08/26/14 BKW: Flame-Broiled Crawlers

08/27/14 Expert Call | Analyzing the BKW/THI Merger

08/28/14 BKW/THI Call Replay & Summary

08/28/14 BOBE: Leaving Much to be Desired

08/29/14 Restaurant Sector Valuation

Events This Week

Wednesday, September 4th

  • LOCO earnings call 5pm EST
  • KONA Liolios Group Gateway Conference

Chart of the Day

Milk prices are up 17.1% YTD and 24.3% YoY.

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Recent News Flow

Monday, August 25th

  • TXRH upgraded to overweight at Stephens with a $32 PT.
  • BWLD took a minor stake in Rusty Taco which has nine locations in three markets.
  • JMBA entered into an agreement with Capgemini in order to accelerate franchise recruiting and development.

Tuesday, August 26h

  • BKW announced the acquisition of THI for C$94.05/share in cash and stock.
  • THI downgraded to sector perform at Scotiabank with a C$90 PT.
  • THI downgraded to hold at Miller Tabak with an $81 PT.
  • PLKI announced its title sponsorship for NCAA Football's Bahamas Bowl.
  • BOBE announced that four of Sandell's nominees were elected to the company's 12-member board.

Wednesday, August 27th

  • THI upgraded to neutral at Credit Suisse with a C$89 PT.
  • THI downgraded to market perform at BMO Capital with a C$92.75 PT.
  • THI downgraded to market perform at Raymond James with a C$92.50 PT.

Thursday, August 28th

  • BOBE downgraded to underweight at Stephens with a $40 PT.
  • DRI reschedules 2014 annual meeting for Friday, October 10th.

Sector Performance

The SPX (+0.8%) outperformed the XLY (+0.3%) last week.  In aggregate, casual dining stocks performed in-line with the XLY as quick-service stocks outperformed the index.

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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