BWLD

Restaurant Traffic – What’s Going On?

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By Kris Rosemann What’s going on with restaurant stocks these days?  Sonic’s (SONC) announcement of preliminary results for the fiscal fourth quarter of 2016, ended August 31, has been the latest catalyst to drag the restaurant sector (BITE) lower due to it reporting “lower-than-expected traffic, reflecting lower consumer spending in restaurants and continued aggressive competitive activity.” Our newsletter portfolios have not been spared the pain as shares of Dividend Growth Newsletter portfolio holding Cracker Barrel (CBRL) have faced pressure since its fiscal fourth quarter report September 14, and Best Ideas Newsletter portfolio holding Buffalo Wild Wings (BWLD) has suffered as a result of the weak data as well. Sonic’s report was not the first we’ve been hearing of slowing consumer … Read more

Chicago, Wings, Beer, Sports, and Smokes

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Image Source: Kevin Dooley By Brian Nelson, CFA Best Ideas Newsletter portfolio Buffalo Wild Wings (BWLD), the bar-and-grill giant that prides itself on serving a delicate balance of “wings, beer, and sports,” is back. Shares have been soaring as of late thanks in part to some strong institutional support–Marcato Capital now owns more than 5% of the company and is pushing for franchising growth—but also due to better visibility into why its operations haven’t been going “gangbusters,” as some may have described it in the past. Well, the answer appears to be rather straightforward, and it all falls squarely on the shoulders of the Windy City. Chicago? – that’s correct. Here is what B-dubs’ CEO Sally Smith said on the … Read more

Yum! Separation on Track; China Picking Up in 3Q?

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Image Source: Yum! Brands, 2015 Annual Report By Jessica Bishop Squashing a recent report from Bloomberg that suggested the Yum! (YUM) separation had been delayed, the executive team heading the KFC, Pizza Hut and Taco Bell franchises said in its second quarter 2016 report, released after the close July 14, that all is well with plans to separate its fast-growing operations in China from the rest of the company. We outlined our latest thoughts on the China separation in our late June piece, “Yum! Does One Plus One Equal More Than Two?” and while not much has changed in the past few weeks, we continue to monitor Yum! — not only in the event the separation causes a mispricing with … Read more

Rivals Gaining Ground Against B-Dubs?

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By Brian Nelson, CFA It turns out that franchisees selling restaurants back to the franchisor is the red flag we knew it was. If you recall, Buffalo Wild Wings (BWLD) announced deal-related expenses related to the acquisition of more than 40 franchised locations in Texas, New Mexico, and Hawaii, “We’ll Be Looking to Add to B-Dubs Sometime after the Drop (October 2015),” and at the time, we were willing to give the restaurant the benefit of the doubt that this wasn’t the red flag it turned out to be. We were wrong. After all, if owning a B-Dubs is so hot, then why would the franchisee be looking to sell it back to the company, and why to the company? … Read more

Debt, Debt and More Debt

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Image Source: Michael Fleshman Many readers may be familiar with the rhetoric of the Presidential Election Cycle of 2016 and Democratic hopeful Bernie Sanders’ view on making “college tuition free and debt free.” You can take a read of the 6 steps Bernie will take as president to make college debt-free here. Many may find his last point rather intrusive to the heartbeat of the American economy and the driver behind innovation and standard-of-living improvements, but we’ll leave that conversation for another day. But what’s the shocking statistic, right? Get this – and I hope you are sitting down. According to an article by the Journal, “more than 40% of Americans who borrowed from the government’s main student-loan program aren’t … Read more

Your Hard-Earned Money

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By Brian Nelson, CFA It was Thursday afternoon, February 11, crude oil prices just hit a 13-year low, and the S&P 500 (SPY) was about to break below key technical support. Then, just as the markets were to fall further, rumors again emerged that OPEC may be scheduling a meeting to curb crude oil output, driving crude oil prices from the depths and the market higher off technical support. A barrel of crude oil continues to trade below the $30 mark, but it was quite the “save.” From where we stand, the market hasn’t been this fragile than at any time during the past decade or so, including during much of the Financial Crisis. Optimists may be whistling past the … Read more

Chipotle and Buffalo Wild Wings…Yikes!

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It’s a perfect storm in fast-casual… We wrote about all of the troubles at Chipotle (CMG), “Chipotle Fourth Quarter Comps Suffer Greatly; Could Qdoba Be the One to Eat Chipotle’s Lunch,” and the fast-casual burrito-maker’s fourth-quarter performance, released February 2, was a doozy. Revenue fell ~7% as comparable restaurant sales dropped almost 15% in the quarter (it still opened up 79 new restaurants, however). Chipotle’s restaurant level operating margin cratered 700 basis points, while net income fell 44%, driving earnings per share down by a similar margin during the period. All of this may have been expected, but it is still quite shocking to witness these “terrible” numbers by the fast-casual giant. Management indicated that January comparable store sales were … Read more

What’s Working in Today’s Market?

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By Brian Nelson, CFA As emerging markets around the world suffer from commodity-price-led economic weakness, capital continues to find a safe-haven in US government bonds (TLT, TBT), but for those equity-oriented funds that mandate a fully-invested status, not something we’re particularly advocates of, assets within US equities have favored “lower-beta” utilities (XLU) and consumer staples (XLP) sectors while cyclically-dependent and credit-levered sectors such as the financials (XLF) and materials (XLB) have suffered thus far in 2016. The industrials (XLI) and energy (XLE) sectors have also encountered higher-than-normal selling pressure in the first few weeks of the New Year, as investors evaluate the global economic landscape and what a prolonged period of low energy prices may mean for the lowest quality … Read more

Excited About Putting Cash to Work…Eventually

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Investors are fretting over a lot of things as of late. China (FXI) announced January 19 that fourth-quarter GDP fell to 6.8%, with many noting that the measure was a 25-year low. Even if you believe that number, which may be a stretch in light of collapsing local stock markets in Shanghai and Shenzhen, the outlook can’t be much better. Steel mills across the country are reeling, and while published housing numbers don’t look that bad, we have a difficult time believing the Chinese banks are in good shape. HSBC (HSBC), Standard Chartered, and Citigroup (C) remain most exposed to what we would describe to be the growing likelihood of a contagion from weakening commodity-dependent sectors in the country. Intel … Read more

The 20 Something’s Stock Portfolio

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A version of this article appeared on our website March 31, 2015. <Our best ideas at any time are included in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio.> The “20 Something’s Stock Portfolio” is the first in a series of articles where we get to the core of what many brand new investors want to do when they are first introduced to the stock market: find exciting companies that they are familiar with that will help compound their wealth over time. Other portfolios that we will share in this series include “The Ultra High Income Portfolio,” “The Economic Castle Portfolio,” “The Dividend Cushion Portfolio,” and “The Intelligent ETF Investor’s Portfolio,” among others. The series of portfolios will … Read more