Salient to Investors:
Shares of casual-dining chains are rallying despite Americans eating out less because investors prefer holding stocks with little foreign exposure.
Rachael Rothman at Susquehanna Financial Group said investors are fearful of holding companies that have a lot of business outside the U.S.
Martin Leclerc at Barrack Yard Advisors is bearish, and expects casual-dining restaurants stocks to underperform because discretionary spending remains lackluster, consumers are fickle, and some stocks are at expensive valuations. Leclerc said the premiums paid in recent acquisitions is helping the stocks trade higher than they typically would relative to the S&P 500.
Malcolm Knapp said dining out is easily postponed, an indicator of what’s happening in the economy.
Jim Stellakis at Technical Alpha said the recent outperformance of the casual-dining index is losing momentum.