Below is a note from CEO Keith McCullough on why we're adding Darden Restaurants (DRI) to the short side of Investing Ideas:
|
Looking for some Consumer Discretionary (XLY) exposure on the short side? Howard Penney is bearish on Darden Restaurants (DRI). Evidently with both the CEO and COO selling stock in the last month, they might be going a little bearish too! Why? Per Penney: "Introduction of pasta and breadsticks at Applebee’s is more of a reason to SHORT DRI, than to do anything with DIN. Yesterday, Applebee’s introduced four new pastas (with breadsticks) to launch at a promotional price of $11.99, just at the tail end of DRI’s 8-week ‘Never Ending Past Bowl’ promotion. We think the 5.3% comp Olive Garden posted in 1Q19 is going to be as good as it can get for them. As we pass through easy compares (during the summer months) for the entire casual dining industry, and into 4Q18 and 2019, we think the road ahead will get more difficult for casual dining in general." Sell on green, KM |