We are adding Zoe's Kitchen to Investing Ideas today. Please see note below from Hedgeye CEO Keith McCullough. Our Restaurants Sector Head Howard Penney will provide an additional update this weekend.
Howard Penney recently added ZOES to his Best Ideas list on the Institutional Research side.
After coming down hard on NDLS, CHUY, PBPB, DFRG and SHAK over the past year, it’s probably apparent that we have a strong bias against “high growth” restaurant companies that have recently come public.
Rest assured this bias has not detracted from our research process. In fact, this prior work in the small cap restaurant field has allowed us to identify a company that we believe is distinctly different from the rest.
We like ZOES on the long side for many reasons, including its:
- Management philosophy and execution
- Unit opening geographic profile
- Early-stage average unit volumes and returns
And it's signaling immediate-term TRADE oversold today within our bullish TREND and TAIL research views.