All casual dining plays are not created equal. With all the discussion of the savings at the pump (does not equate to all that much in my opinion), many believe consumers with use a good portion of funds eating out. Now with any group you are going to have your leaders and laggards. For each TXRH which is off just 2% from all time highs you will have a LOCO 54% off its recent 52 week highs. For every SONC which is essentially at all time highs today, you have a NDLS 46% from its 52 week high. MCD, like SONC, is at all time highs and perhaps CMG which is off 39% from its recent highs should instead of cooking hamburgers should look to enter the breakfast space. I think you get the picture. Lets take a look at some of the creme de la creme in the space and how we featured them in some of our recent daily Game Plans.
In our Wednesday 3/16 Game Plan we examined TXRH and on 3/29 it took out a bull flag pattern gaining almost 4% in active trade. Last week it jumped nearly 7% and Monday it did record a bearish engulfing pattern, but it looks to be on the verge of a possible bullish MACD crossover.
Stocks that can be bought as they take out bull flag patterns are TXRH. TXRH is a best in breed casual diner up 17% YTD and 12% over the last one year period and sports a dividend yield of 1.8%. Earnings have been solid advancing 12.7, 2.8 and 3.1% on 2/23, 11/3 and 5/5 and fell 4.7% on 8/4. The stock is higher 4 of the last 5 weeks and perhaps more profound is the last 2 weeks CLOSED above the huge week ending 2/26 which rose 14.6% (that week also took out a long 6 1/2 month cup base trigger of 40.92). The tight recent action has formed a bull flag and enter with a buy stop above 42.60. These type of patterns should not last to long, so if this breakout does not occur in the next week it would be considered void.