Below is a note written by CEO Keith McCullough on why we're adding Texas Roadhouse (TXRH) to the short side of Investing Ideas today:
With the US stock market "off the lows" of the day, we get a short-selling opportunity in names we don't like. With Powell inflating the cost of living for Americans (inflating gas prices in particular), I like casual dining shorts that are on Howard Penney's list like Texas Roadhouse (TXRH).
Here's an interesting economic point from Penney on recent US Restaurant traffic trends (not good):
"The eight-month run of positive same-store sales ended in February with a (0.6%) decline. Weather may be a reason, but I suspect there is more to the decline than just weather. First, one of the biggest issues the industry is facing is aggressive pricing, with guest check up 40bps sequentially to 3.1%. Given the aggressive pricing across the industry, we saw a (3.7%) decline in same-store traffic."
Sell the bounce to lower-highs,