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Investment Ideas

The table below lists our Investment Ideas as well as our Idea Bench -- 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: PBPB, TAST and More - chart1

Notable Callouts

We are removing short PBPB from both our Best Ideas and Investment Ideas list.  Note to follow shortly.

Recent Notes

09/15/14 Monday Mashup: SBUX, LOCO and More

09/18/14 Short SBUX Call Today @11AM

09/18/14 Short SBUX Call Replay

Events This Week

Tuesday, September 23rd

  • JMBA Wedbush California Dreamin Consumer Conference 1:20 pm EST
  • DENN Wedbush California Dreamin Consumer Conference 2:30pm EST
  • KONA Wedbush California Dreamin Consumer Conference 2:30pm EST

Chart of the Day

Monday Mashup: PBPB, TAST and More - chart2

Recent News Flow

Monday, September 15th

  • DRI upgraded to outperform at CLSA with a $51 PT.
  • THI announced preliminary 3Q14 quarter-to-date same-store sales of +3.6% in Canada and +7.0% in the U.S.
  • RRGB announced it is two weeks away from opening its newest restaurant in Illinois.
  • DRI filed an investor presentation regarding operating initiatives underway at Olive Garden and other restaurants.

Tuesday, September 16th

  • JMBA introduced made-to-order Energy Bowls in stores nationwide. "Jamba's new Energy Bowls are a nutritious blend of real, whole fruit and soymilk or fresh Greek yogurt, topped with an assortment of dry toppings and fresh fruits."
  • DNKN announced its commitment to 100% sustainable palm oil for all Dunkin' Donuts U.S. restaurants by 2016.
  • SONC announced its FY15 outlook which includes EPS growth guidance at the high end of its 14-20% long-term target, positive same-store sales in the low single digit range, drive-in-level margin improvement of between 50 to 100 bps and more.

Thursday, September 18th

  • DRI sent a letter to shareholders urging them to vote the BLUE proxy card "FOR ALL" of Darden's nominees.  In the letter, Darden fired shots at two of its former employees - former Olive Garden President Brad Blum and former Olive Garden executive Bob Mock - who are currently working in advisor roles to activist Starboard Value.
  • MCD increased its quarterly dividend by 4.9% to $0.85 from $0.81.
  • TAST exercised its right of first refusal to purchase 30 Burger King restaurants in eastern North Carolina for a total purchase price of $20 million payable in cash.  Carrols plans to sell these properties and lease them back for net proceeds of $13 to $14 million.  Assuming the low end of that range implies that TAST is buying 30 locations for $7 million or approximately $233,333 per unit.

Sector Performance

The SPX (+1.3%) outperformed the XLY (+0.2%) as both casual dining and quick service stocks, in aggregate, outperformed the XLY.

Monday Mashup: PBPB, TAST and More - chart3

Monday Mashup: PBPB, TAST and More - chart4

XLY Quantitative Setup

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

Monday Mashup: PBPB, TAST and More - chart5

Casual Dining Restaurants

Monday Mashup: PBPB, TAST and More - chart6

Monday Mashup: PBPB, TAST and More - chart7

Quick Service Restaurants

Monday Mashup: PBPB, TAST and More - chart8

Monday Mashup: PBPB, TAST and More - chart9

Howard Penney

Managing Director

Fred Masotta