TALES OF THE TAPE

Companies in PE crosshairs have been leading the way over the past week.

On March 17th, I wrote about a selection of companies that could be on the “A” list for a private equity transaction: CAKE, PFCB, MSSR, TXRH, BOBE, EAT, CHUX, RRGB, PEET, and CPKI.  CKR was already, by then, being targeted by parties interested in acquiring the chain.  In the past week, restaurant stocks have been performing strongly.  As the rumor mill has gained steam, and CPKI has confirmed that the firm has hired Moelis & Company to explore financial and strategic alternatives.  The chart below illustrates clearly that the “A” list, plus CKR, has strongly outperformed over the past week. 

TALES OF THE TAPE - alist413

In terms of upgrades/downgrades, CAKE was moved from “conviction buy” to “buy”.  Estimates were lowered at PFCB based on the unfavorable impact of winter weather in February, calendar shifts, and near-term pressure from promotions and product enhancements.  PFCB's shares are still rated “outperform”, however.  YUM and KKD are reporting this week.  As can be seen in the table below, KKD has been strongly outperforming its peers.

TALES OF THE TAPE - stcok 413

TALES OF THE TAPE - commod 413

Howard Penney

Managing Director