Tuesday, February 09, 2010

Short Restaurants?

Check out these recent levitations:

I had never heard of that last one - BJ's Restaurants - an up-and-comer out west.

Sure, the mom-and-pop cafes, diners, and restaurants have been dropping like flies, and sending their residual customers to the likes of better capitalized institutions like Panera and Chipotle...

But I submit that the if there was any genuine economic wind at the backs of these high-flyers (beyond the Fed printing dollars round the clock), that it was falling commodity prices in 2009 - including the dip in oil/gasoline.

I've had it in my mind to short eateries within this Greater Depression - because once commodity prices start rising again, they'll be absolutely dead.

Apparently, I'm not the only one waxing bearish....

Short interests today (as a percentage of float):

PNRA - 13.10%

BWLD - 25.60%

CMG - 19.00%

BJRI - 30.7%

And I found another - PF Chang's - which has 35.40% of its float shorted at the moment.

With short interest so high, I'm sure the puts ain't cheap. Still, I'm going to take a hard look at them.


Justin Time said...

You might be on to something with this one.

I counted a 7:2 worker to customer ratio at the local Chipolte a few weeks back. The Starbucks next door was a ghost town.

But on the other hand, the crowd was out the door at Panera for lunch. Although this might be attributable to the loitering wifi mooches.

And there was a 2 hour wait last time I was at Longhorns. But I am guessing a major percentage of that was due to all the after Christmas gift card users...

And then you have all the 2 eat for $20 deals I keep seeing. Granted, the food amounts to a TV dinner and they gouge you 3 bucks per soft drink.

CaptiousNut said...

I don't get the appeal of Panera.

Is it a chick place or something?