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Monday Mashup - CHART 1

RECENT NOTES

9/30/15 CMG | LONG IN THE TOOTH?

9/28/15 SBUX | THE APP IS WORKING | HOW BIG IS BIG?

9/21/15 DFRG | WORKING THRU THE STAGES OF GRIEF | GOING LONG

9/16/15 SHORT SMALL-CAP BURGER CHAINS | QUICK SERVICE CAN’T AFFORD $15 MINIMUM WAGE

RECENT NEWS FLOW

Friday, October 2

DIN | Increased quarterly dividend by 5% to $0.92 per share of common stock. Additionally, they raised the share repurchase authorization to $150mm from the currently remaining authorization of $63mm (ARTICLE HERE)

 

Thursday, October 1

TAST | Announced the acquisition of five Burger King restaurants in Ohio and West Virginia (ARTICLE HERE)

JMBA | CEO and Chairman James White announced his retirement (ARTICLE HERE)

Wednesday, September 30

DFRG | Announced the opening of the Hoboken Grille, this is the 21st Grille location for DFRG across the country (ARTICLE HERE)

 

Tuesday, September 29

PLAY | Announced proposed secondary offering of common stock, selling stockholders will receive all proceeds from the sale of these shares (ARTICLE HERE)

 

Monday, September 28

ZOES | Named Sunil M. Doshi their new CFO, he previously served as CFO of Fossil Americas, a $1.8bn division of Fossil Group (ARTICLE HERE)

CMG | Carnitas has returned to 90% of Chipotle restaurants, the company expects to have carnitas back in all restaurants by the end of November (ARTICLE HERE)

QSR | Announced the proposed acquisition of Quick Group, a fast food burger chain in France (ARTICLE HERE)

SECTOR PERFORMANCE

Casual Dining and Quick Service stocks that we follow widely underperformed the XLY last week. The XLY was up +1.6%, top performers on a relative basis from casual dining were CHUY and CBRL posting an increase of +5.6% and +0.4%, respectively, while ZOES and YUM led the quick service group this week up +6.2% and +2.2%, respectively.

Monday Mashup - CHART 2

Monday Mashup - CHART 3

XLY VERSUS THE MARKET

The XLY has fared better than most other sectors in the YTD time period and as of late especially. In the last five trading days the SPX was up +1.0% and the XLY was up +1.6%, outperformed by XLV (Healthcare), XLE (Energy), and XLB (Materials).

Monday Mashup - CHART 4

QUANTITATIVE SETUP

From a quantitative perspective, the XLY looks bearish from a TRADE and TREND perspective, TRADE support is 72.14.

Monday Mashup - CHART 5

CASUAL DINING RESTAURANTS

Monday Mashup - CHART 6

Monday Mashup - CHART 7

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QUICK SERVICE RESTAURANTS

Monday Mashup - CHART 9

Monday Mashup - CHART 10

Monday Mashup - CHART 11

 

Keith’s Three Morning Bullets


Bad Jobs à Dollar Down, Rates Down à Energy/Basic Materials Crash/Squeeze (so much for the rate hike):

  1. US DOLLAR – down USD on Friday as rate of change in NFP hit another YTD #slowing low = EUR/USD up another +0.6% this am testing $1.13 and the headline chase for everything “reflation” (from Glencore to Crude and Russian stocks) is on!
  2. UST 2YR – after 7 consecutive failed “breakouts” > 0.75% in the 2yr, it got hammered -11bps last week and is down at 0.57% this morning (10yr = 1.99%) as Bond Bear hopes of a rate hike get blasted into 2016; rates were oversold Friday on the lows
  3. STOCKS – but, but – “stocks are up” – sure, off those early Friday morning lows where both the Russell and SPX tested YTD lows, and led largely by Basic Materials (XLB) reflation of +2.9% while Financials (XLF) were down w/ rates -0.5% on the wk

SPX immediate-term risk range = 1; UST 10yr Yield 1.94-2.09% (both Bond Yields and SPX signaling lower-highs)

 

Please call or e-mail with any questions.

Howard Penney

Managing Director

Shayne Laidlaw

Analyst