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Monday Mashup: BWLD, SBUX and More

Monday Mashup: BWLD, SBUX and More - 1

 

Recent Notes

12/22/14 Monday Mashup: BOBE, RT and More

12/23/14 Industry-Wide Comp Outlook (2015)

12/23/14 Statement Analysis (Replay)

12/29/14 Monday Mashup: 'Tis the Season


Events This Week

Tuesday, January 6th

  • SONC earnings call 5pm EST

Thursday, January 8th

  • RT earnings call 5:00pm EST

 

Chart of the Day

Monday Mashup: BWLD, SBUX and More - 2

 

Recent News Flow

This Morning

  • BOBE upgraded to buy at Janney Capital with a $60 PT.
  • DPZ upgraded to buy at Janney Capital with a $110 PT.
  • LOCO upgraded to outperform at RW Baird with a $34 PT.
  • PBPB upgraded to outperform at RW Baird with a $17 PT.
  • BWLD PT increased to $205 from $180 at UBS.
  • BWLD downgraded to neutral at RW Baird with a $180 PT.
  • SBUX downgraded to neutral at Janney Capital with an $85 PT.

Monday, December 29th

  • SONC announced a new agreement (with Fast Eats, LLC) for franchise development of eight new drive-ins in the Albany, NY, area over the next seven years.
  • DFRG Double Eagle Steak House was named to OpenTables list of the 100 best restaurants and 100 best steakhouses in America.
  • DAVE announced the closure of three restaurants in the Richmond, VA area and anticipates incurring impairment charges at up to four additional company-owned restaurants. The closure of the three Richmond locations would have been accretive to full-year diluted adjusted EPS by $0.04 and same-store sales by +0.5% had they been closed at the beginning of the year.
  • COSI director Michael O'Donnell announced his departure, effective Jan. 1st.  Mr. O'Donnell will be replaced by an independent restaurant expert, David Lloyd, of Highland Consumer Fund.

 

Sector Performance

The XLY (-0.3%) outperformed the SPX (-1.1%) last week, as both casual dining and quick service stocks, in aggregate, outperformed the XLY.

Monday Mashup: BWLD, SBUX and More - 3

Monday Mashup: BWLD, SBUX and More - 4

 

XLY Quantitative Setup

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

Monday Mashup: BWLD, SBUX and More - 5

 

Casual Dining Restaurants

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Monday Mashup: BWLD, SBUX and More - 7

 

Quick Service Restaurants

Monday Mashup: BWLD, SBUX and More - 8

Monday Mashup: BWLD, SBUX and More - 9


McCullough: Why Consensus Is (Still) Getting Bamboozled By Bonds

Editor’s note: This is a brief excerpt from CEO Keith McCullough’s live Real-Time Alerts broadcast earlier today. For more info on how you can subscribe to Real-Time Alerts click here.

*  *  *  *  *  *  *

We like bonds. We like TLT. It’s been a huge call for our macro team and we make no apology for it.

 

The reality is that being long bonds today, yesterday, the day before that, the month before that has been awesome. Just awesome. It has bamboozled consensus which still doesn’t get it. 

McCullough: Why Consensus Is (Still) Getting Bamboozled By Bonds - rta55

When you have global growth slowing (which we don’t think the U.S. will decouple from) and deflation—the two core things that the bond market cares about, growth and inflation slowing at the same time—you buy bonds. And you buy more. And you buy them on pullbacks.

 


January 5, 2015

 

In the first RTA Live session of 2015, Keith discusses the positions in Real Time Alerts as of 10:30AM ET on January 5, 2015 and answers subscriber questions live on the air.


real-time alerts

real edge in real-time

This indispensable trading tool is based on a risk management signaling process Hedgeye CEO Keith McCullough developed during his years as a hedge fund manager and continues to refine. Nearly every trading day, you’ll receive Keith’s latest signals - buy, sell, short or cover.

MACAU DECEMBER DETAIL

Takeaway: December under the hood: no relief in sight

CALL TO ACTION

While December was partially a throw away month, the details behind the headline 30% decline were not uplifting.  Adjusting for the reclassification of some premium mass tables to direct VIP to circumvent the smoking ban, mass revenues still likely declined at least high single digits. VIP hold percentage approximated normal so bad luck could not be blamed. And while the Chinese President’s visit certainly had a negative impact, it wasn’t as clear cut as universally expected. GGR fell by a similar percentage in the 1st and 2nd halves of the month and there wasn’t much of a pick up after he left.

 

Following the relief rally in the stocks immediately after the President’s visit, we’re back on the negative side of the trade/trend. Our forecast calls for 9 more months of negative growth with February as the nadir.  Unfortunately, forward EBITDA estimates remain stubbornly high, substantial risk remains and no positive catalysts are apparent.

 

Please see our detailed note:  http://docs.hedgeye.com/HE_Macau_1.5.15.pdf


Keith's Macro Notebook 1/5: Euro | Oil | UST 10YR

 

Hedgeye CEO Keith McCullough shares the top three things in his macro notebook this morning.


European Banking Monitor: Grexit Fears Priced Into Financials Swaps

Takeaway: International risk remains high as Greece's elections later this month and Russia's ongoing woes couple with steady far-East press

Below are key European banking risk monitors, which are included as part of Josh Steiner and the Financial team's "Monday Morning Risk Monitor".  If you'd like to receive the work of the Financials team or request a trial please email 

 

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European Financial CDS - Swaps mostly widened in Europe last week.  Investors continue to focus on the uncertainty of upcoming Greek elections; Greek banks' CDS widened between 159 and 229 bps last week.

 

European Banking Monitor: Grexit Fears Priced Into Financials Swaps - chart1 FInancials CDS

 

Sovereign CDS – European Sovereign Swaps mostly tightened over last week. German sovereign swaps tightened by -21.3% (-4 bps to 14 ) and Portuguese sovereign swaps widened by 7.8% (14 bps to 187).

 

European Banking Monitor: Grexit Fears Priced Into Financials Swaps - chart2 sovereign CDS

 

European Banking Monitor: Grexit Fears Priced Into Financials Swaps - chart3 sovereingn CDS

 

European Banking Monitor: Grexit Fears Priced Into Financials Swaps - chart4 sovereign CDS

 

Euribor-OIS Spread – The Euribor-OIS spread (the difference between the euro interbank lending rate and overnight indexed swaps) measures bank counterparty risk in the Eurozone. The OIS is analogous to the effective Fed Funds rate in the United States.  Banks lending at the OIS do not swap principal, so counterparty risk in the OIS is minimal.  By contrast, the Euribor rate is the rate offered for unsecured interbank lending.  Thus, the spread between the two isolates counterparty risk. The Euribor-OIS spread widened by 1 bps to 10 bps.

 

European Banking Monitor: Grexit Fears Priced Into Financials Swaps - chart5 euribor ois

 

Matthew Hedrick

Associate

 

Ben Ryan

Analyst

 

 


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