Monday Mashup: Changes to Our Investment Ideas List

Monday Mashup: Changes to Our Investment Ideas List - 11



We made several changes to our Investment Ideas this week.  In the coming weeks, we will be outlining these changes in more detail.


Perhaps the two most notable moves are the relegation of JACK and PLKI from the Long List to the Long Bench.  We like both names longer-term, but believe the impressive recent outperformance means the street is beginning to understand the long thesis and incremental good news is likely baked-in.


We’ve also expanded our Short Bench with the addition of several casual dining names.  We’re looking to get aggressive on the short side, after we roll easy comps, as we head into the spring.


recent notes

01/05/15 Monday Mashup: BWLD, SBUX and More

01/08/15 SBUX: Why We Think It’s a Short

01/08/15 Knapp Headlines Strong, But…

01/09/15 SBUX: Part of the Story is Going Untold

Events This Week

Monday, January 12th


Tuesday, January 13th


Wednesday, January 14th

  • DPZ Investor Day


Chart of the Day

Monday Mashup: Changes to Our Investment Ideas List - chart2


Recent News Flow

Monday, January 5th

  • 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.
  • LOCO announced an extension of its Under 500 line with four new menu items, each under 500 calories.  The new offerings include the Chicken & Shrimp Grilled Tostada, Double Chicken Wet Burrito, Grilled Chicken & Kale Salad, and Skinny Chicken Quesadilla.
  • DFRG opened its newest Del Frisco’s Grille in Pasadena, CA.  The restaurant spans more than 7,000 square feet and can entertain about 200 people between both indoor and outdoor seating.

Tuesday, January 6th

  • LOCO announced the opening of three new franchised locations in California (Victorvile, Stockton, and Santa Paula) and one new franchised location in Nevada (Reno).
  • DIN Applebee’s introduced its new Pub Diet menu which features fiber and protein rich dishes with less than 600 calories.  The menu includes four dishes starting at $9.99: Pepper-Crusted Sirloin & Whole Grains, Cedar Grilled Lemon Chicken, Shrimp & Broccoli Cavatappi, and Savory Cedar Salmon.
  • DNKN announced its intention to replace its senior secured credit facility with a new securitized financing facility, expected to be comprised of $2.3 billion of senior fixed-rate term notes and $100 million of variable funding notes.

Wednesday, January 7th

  • FRGI announced the promotion of three of its top executives.  CFO Lynn Schweinfurth was promoted to senior vice president, Chief Counsel Joseph Zirkman was promoted to senior vice president, and Chief Development Officer John Todd was promoted to vice president.

Thursday, January 8th

  • DNKN announced expansion plans in China with the signing of a development agreement that calls for the development of more than 1,400 restaurants across China over the next 20 years as part of a joint venture between Jollibee Worldwide Pte Ltd. and Jasmine Asset Holding Ltd.
  • LOCO celebrated the grand opening of its newest location in Goodyear, Arizona – its 19th restaurant in the state.  The 3,000 square foot restaurant has room for 62 guests.
  • SBUX announced COO Troy Alstead will take a leave from the company, effective March 1st.  The company will provide detail on transition plans during the company Q1 earnings call on January 22, 2015.


Sector Performance

Monday Mashup: Changes to Our Investment Ideas List - 3


Monday Mashup: Changes to Our Investment Ideas List - 4

XLY Quantitative Setup

Monday Mashup: Changes to Our Investment Ideas List - 5

Casual Dining Restaurants

Monday Mashup: Changes to Our Investment Ideas List - 6


Monday Mashup: Changes to Our Investment Ideas List - 7

Quick Service Restaurants

Monday Mashup: Changes to Our Investment Ideas List - 8


Monday Mashup: Changes to Our Investment Ideas List - 9

Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more