Posts by Chris Nichols

  • The drive-in delivers again: Sonic surges to yet another all-time high

    Chris Nichols at Yahoo Finance 4 days ago

    Drive-in hamburger restaurant Sonic (SONC) was trading at its latest record price Monday, bringing its gain for 2015 to 23% and its increase in the past 52 weeks to 65%, after it reported a jump in sales at company-owned and franchised locations in the most recent quarter.

    Recently, shares of Oklahoma City-based Sonic were up 5.3% to $33.47. The session high -- and now best ever -- was $33.93. The latest step up followed news that system-wide same-store sales for the second quarter ended Feb. 28 rose about 11.5%. Same-store sales were higher by 11.3% at company drive-ins and 11.5% at franchises, the latter of which are about 89% of the 3,500-store system.

    Though the majority of Sonic's main valuation measures are above their five-year averages, according to FactSet, any concerns about its trading levels haven't prevented the stock from climbing to a series of all-time highs in a rally that's now in its fourth year. The compound annual growth rate was 59.4% from the close of 2011 through the end of 2014.

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  • 10 ways to 'fix' McDonald's (if it needs fixing, that is)

    Chris Nichols at Yahoo Finance 4 days ago

    McDonald's (MCD) takes plenty of criticism, and there's certainly no shortage of advice on how to return the Golden Arches to its days of glory.

    All it has to get the detractors and pundits to move along is the following: Serve better-for-you food that won't lead to obesity; do so cheaply and very quickly at 36,000 sparkling and modern global restaurants; offer plenty of menu choices, but not too many choices; pay workers a sound wage; buy goods at a fair price from suppliers who don't use hormones or antibiotics or rely on genetic modification; keep profit margins climbing for franchises and company-owned stores; ensure the dividend continues to get raised every year; and grow the stock price and profits annually for investors.

    If only every company had it that good, right?

    Not-as-much-work options

    These-take-some-work options

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    7. Make sure stores are clean and modern. Some are old, while others are brand new. The updates are ongoing, though theoretically the pace can be picked up.

     

  • McDonald's jumps in one of its biggest rallies in past five years

    Chris Nichols at Yahoo Finance 9 days ago

    McDonald's (MCD) stock had an unusually strong session Wednesday -- but it wasn't immediately clear what sparked the run.

    The shares closed up 3.9% at $98.66, and at its high for the day of $99.31, the stock had risen 4.6% from Tuesday. Volume was considerably higher than normal as well, with almost 16 million shares traded. On an average day, 7.2 million McDonald's shares trade hands, according to Yahoo Finance data. At the same time, CNBC's Dominic Chu, commenting on Twitter, noted heavy volume in McDonald's call options, a bet the stock will advance.

    The only obvious news in fact wasn't particularly positive -- that activists want European regulators to investigate the manner in which Oak Brook, Ill.-based McDonald's pays its taxes.

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    McDonald's hasn't yet responded to a request for comment. However, companies often have a policy or preference not to discuss stock-price movements.

  • Papa John's stock slips as earnings outlook needed a bit more 'better'

    Chris Nichols at Yahoo Finance 9 days ago

    Better ingredients, better pizza -- great. Now maybe better earnings?

    With its stock trading at a record high, at a valuation matching its peak of at least the last five years, Papa John's (PZZA) wasn't in any position for a misstep before its fourth-quarter earnings release. And a misstep arrived.

    Granted, it wasn't a tremendous one at all, but the fact that management offered a somewhat slower-than-anticipated profit growth outlook for 2015 was enough to edge the shares downward Wednesday. Again, this really is a matter of good or very good projections, so it's entirely possible the "shortfall" will be forgotten soon enough. If the market keeps rallying, consumer discretionary stocks keep jumping and restaurants keep rising, Papa John's may well keep climbing.

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    Now we have to see if that's enough to convince investors, after today, to resume elevating the shares.

  • Tech titan? Domino's sales boosted by 'tech-to-table' approach

    Chris Nichols at Yahoo Finance 10 days ago

    Despite a shortfall on earnings per share, Domino's (DPZ) had such a strong quarter of sales, helped by its implementation of new technologies, that Wall Street traders were indicating the profit miss wasn't worth spending much time worrying about.

    The Ann Arbor, Mich.-based pizza maker, trailing only Pizza Hut in terms of store count, said Tuesday that overall revenue growth was much better than analysts had anticipated in the fourth quarter, while same-store sales climbed around the world.

    With all that considered, the stock, which has been trading at record levels, was lower by 1.1% to $103.31 recently. But to put that in perspective, it's not an especially significant step down since Domino's shares had a compound annual growth rate of 65% from the close of 2008 to the end of 2014. And because that rally has also elevated its valuation measures to five-year highs, were there a panic about profits it likely would have led to a more substantial decline.

    Most of Domino's new stores are opening outside the U.S., with last year seeing 662 net new international stores among the 743 total.

  • Domino's and Papa John's: To stay hot, these stocks need more dough

    Chris Nichols at Yahoo Finance 11 days ago

    For Domino's (DPZ) and Papa John's (PZZA), two of the nation's largest pizza chains, the mammoth multiyear rallies in their stocks mean neither has any margin for error. On Tuesday, they'll both get the opportunity to tell Wall Street that they're still getting it right -- or be left to explain why they didn't.

    Quite simply, both have been stellar, delivering staggering profits to investors who've held onto the shares. Operationally, they've also been sound, helped along by getting customers to believe that, as chains go, they're top-tier, as well as by building ordering technology that meshes with our smartphone-centered lives.

    Since the market rally began in 2009, all manner of stocks have ascended, whether good operators or perhaps not as good. Restaurants are no different, having been on the whole tremendous during the five-plus year run for shares. Betting against the industry (and stocks in general) has been only for the brave, but it's also meant so many equities are, in the often-repeated phrasing, priced for perfection.

  • Here's what activist investors want from McDonald's new CEO

    Chris Nichols at Yahoo Finance 11 days ago

    McDonald's (MCD) new CEO Steve Easterbrook officially starts work in a week, and already investors want to know what his plans are to turn around the embattled fast food giant.

    The press, former managers, investment firms, industry analysts and McDonald's customers all have ideas for how to "repair" the Golden Arches and get the shares out of their narrow band in the $90s. The company has its own thoughts, such as reworking the kitchens, remodeling restaurants, customizing burgers, simplifying the menu and improving service times. Not surprisingly, big shareholders have some suggestions, as well. These tend to be less about the Big Macs and more of the type Wall Street really likes: Bringing in new directors, parting ways with restaurants and selling real estate.

    Easterbrook, who is taking over for Don Thompson, will hear from these voices, and not entirely about the fries. So in advance of his first day, here's a summary of three notable activist options. (And maybe they'll want to talk about the fries, too.)

    Activist action

    --CalPERS sold a few shares -- 162,160 -- but it still owns 2.7 million shares.

  • Richly valued Noodles & Co. crushed in worst single-day rout

    Chris Nichols at Yahoo Finance 14 days ago

    Noodles & Co. (NDLS) was having its worst day ever as a publicly traded stock Friday as its ultrahigh valuation -- even after a 27% drop in 2014 -- had no chance to withstand weaker-than-anticipated quarterly numbers and a lowered outlook.

    In recent trading, the Colorado-based noodles maker was sinking 28% to $19.84. The previous biggest percentage fall was a 16.1% down day last August. And further demonstrating the commitment to selling was the fact that volume was 30 times more than a normal trading day.

    Were one to consider the numbers Noodles reported Thursday afternoon on their own, it perhaps wouldn't seem so bad. Fourth-quarter revenue was up 18.7% to $108.5 million. Same-store sales, system-wide, rose 1.3%. Earnings before items climbed 9.2%, and on a per-share basis, Noodles earned 13 cents a share. However, the world of earnings doesn't work well with "not so bad." Companies have investor and analyst estimates to meet, and Noodles missed on all those.

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  • Potbelly has best day ever, but short-covering is probably part of it

    Chris Nichols at Yahoo Finance 16 days ago

    Potbelly (PBPB), the sandwich maker whose stock spent its first few months on the market going in reverse, was having its best day ever on Wednesday. However, the gain likely was getting a boost from the fact that short sellers have a significant position in the name.

    The shares of Chicago-based Potbelly recently were up 11.4% at $15.82 on active volume. The session high was $16.25.

    Even if short sellers closing their positions was at least partly responsible for the move -- short interest is 25.8% of the float, according to FactSet -- the quarter still was a good one. Potbelly had a fourth-quarter adjusted profit of 6 cents a share on sales of $84.8 million, with a same-store sales increase of 3.7% at company-owned locations. All of those surpassed estimates. Wall Street had been projecting earnings of 3 cents a share, revenue of $83.3 million and a 2.9% climb in same-store sales.

    Previously, the single-largest move up for the stock was a 9.3% gain in November 2013. Potbelly had gone public the month before.

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  • Burger King has the template to remake McDonald's

    Chris Nichols at Yahoo Finance 17 days ago

    Restaurant Brands International (QSR), the company formed late last year by the merger of Burger King and Tim Hortons, started its earnings history with an upbeat report, one that investors thought enough of to send the stock sharply higher. On Tuesday, Restaurant Brands said its fourth-quarter revenue was $416.3 million, with a loss of $514.2 million, or $2.52 a share. For the year, revenue was $1.2 billion, with a loss of $2.34 a share. The results included various merger and debt-retirement costs, so the losses weren't leading to any particular concerns. The focus instead was on the positives. For the full year, Tim Hortons same-store sales rose 3.1%, and at Burger King they were up 2.1%. Sales for the entire Tim Hortons' system climbed 6.6%, while at Burger King, the advance was 6.8%. Comparable sales for the fourth quarter also were higher. After the numbers were released, the shares added 8.7% to $42.12.

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