#$loco

[speedycalls]

$GBT $OCLR $CRK $LOCO Great alerts!!! 🚨 using our proprietary Options Scanner & Algotrading Tools

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5 Stocks to Watch that Report Earnings Tomorrow

Ulta Beauty (ULTA): Many investors hold Ulta in high regards due to a track recorded extending of topping analyst’s top and bottom line targets. The cosmetics company delivered at least 20% growth in each of the past 8 quarters with double digit gains in key same store sales metrics. When you factor in that similar businesses struggled in recent years, Ulta’s gains look even more remarkable. Robust fundamental support over this time led to a predictable boom in the stock price. Shares boasted a 36% increase in the past 12 months and historically jump about 5% immediately through the print. Investors should still proceed with caution, considering Ulta faces tough comparisons and irrationally high earnings targets.

What are you expecting for ULTA? Get your estimate in here!

VeriFone Systems (PAY): Shares of VeriFone tumbled 22% in the past 12 months on the back of weak third and fourth quarters results to cap off fiscal 2016. Management’s comments following the third quarter, in particular, caused analysts to cut forward estimates. To offset additional losses, the company initiated a new restructuring program focused on streamlining operations and designing a long term growth strategy. Apart of that includes adopting Apple, Google and Samsung mobile payment applications into pre existing electronic payments systems. Nonetheless, currency headwinds, depressed consumer spending and ongoing restructuring costs could hamper financial performance for the fiscal first quarter.

What are you expecting for PAY? Get your estimate in here!

Stratasys (SSYS): 3D Systems dismal top line performance in Q4 portends weak results for Stratasys tomorrow morning. Financial performance for SSYS maintains a steady slide down with results in each of the past 5 quarters recording negative growth. In fact, sales for the third quarter missed the Estimize sales target by nearly 10%, but the stock still trades significantly higher compared to a year earlier. Shares jumped 25% in the past 12 months and tend to increase by 1% immediately through the print.

What are you expecting for SSYS? Get your estimate in here!

Zumiez (ZUMZ): The company reported a 14.3% increase in net sales with comparable sale gains of nearly 10% for the month of January. In the most recent monthly sales report management also raised fourth quarter sales and earnings guidance to the range of 60 to 66 cents per share. The biggest drivers of this recent success includes a more robust ecommerce platform, efficient customer service, and expanded lifestyle lineup. Despite a rosy financial outlook, the stock continues to struggle with share value down 15% in the past 3 months.

What are you expecting for ZUMZ? Get your estimate in here!

El Pollo Loco (LOCO): The company’s share of ups and down have driven investors loco during earnings season. After a strong second quarter which topped analyst’s targets on both the top and bottom line, LOCO followed it up with a disastrous third quarter that did the exact opposite. Consequently shares are down nearly 10% in the past 3 months and historically struggle through the 30 days after a report. The biggest concerns this quarter comprise rising labor costs and new store opening expenses and its impact on the bottom line.  

What are you expecting for LOCO? Get your estimate in here!

Click Here to Estimate

[speedycalls]

$LOCO 12 Calls BUYING Activity expiring on 21st Oct, Vol 1000

[estimize]

Can this other Mexican restaurant chain ever catch up to Chipotle?

El Pollo Loco is scheduled to report 3Q2015 earnings today after market close. Despite a popular IPO in 2014, the stock has taken a beating but has been showing positive earnings surprises over the past three quarters. The company serves “Mexican” entrees, ranging from tostada bowls to burritos with an emphasis on chicken meals. The Estimize consensus is anticipating EPS of  $0.16 and revenue of $90.3 million and Wall Street Analysts are calculating EPS of $0.15 and revenue of $90.4 million.

As the health craze has taken over the US, chain restaurants have come under scrutiny for employing unethical meat procurement processes as well as providing fatty and unhealthy foods. The chains are adapting with “green” initiatives, but some are known by the public to be disadvantageous to one’s health. Luckily for El Pollo Loco, a trend in fresh menu items has been employed to attract the health conscious customers. These entrees contain 500 calories or less and do not compromise flavor.

However, store traffic has been declining as increased food prices and labor costs have struck the food industry as a whole. In California, the minimum wage is set to jump from $9 in 2016. Menu prices will in turn have to increase and profits would take a serious hit, given that most of the business is operated out of California.

One issue that has been holding the company back has been its geographic presence. A majority of store units remain in California. Aside from California, the restaurant holds a presence in Arizona, Texas, Nevada and Utah, with over 80% of stores in California. This marks a tremendous opportunity for expansion programs across the states. From 2011-2014, El Pollo Loco had a massive debt problem, which prevented any chances of growth. Since then, company’s cash flow has significantly increased as liabilities have been reduced by over $150 million.  This leaves options like opening locations in Florida, New York, and even Illinois. All three states have great Hispanic populations and the food may fare well in these settings.

Get your estimate in for LOCO here!

(Photo Credit: Dale Chumbley)

[estimize]

[Podcast] Is Shake Shack's valuation out of touch?

Welcome to This Week on Estimize. This week we’re joined by the Co-Founder of ChartIQ, Dan Schleifer. In this episode Leigh and Dan discuss the valuations of casual dining stocks Jack in the Box, El Pollo Loco, and Shake Shack, they share their bearish views on King Digital, and they chat about Semantic which Leigh calls “the old hag of the cyber security industry”.

(Photo Credit: Will)

[frankzorrilla]

Pollo Loco Ready For Gains That Can Drive You Crazy

One of the best ways to narrow down your universe during earnings season is to keep track of the stocks that had an outsize gains due to their earnings report.  PEAD Post Earnings Announcement Drift is a phenomenon that has been around for years.  "Post Earnings Announcement Drift (PEAD) is the tendency for a stock’s cumulative abnormal returns to drift in the direction of an earnings surprise for several weeks (even several months) following an earnings announcement.

PEAD usually works best on stocks that have been neglected for a long time, stocks that are not widely followed, and stocks that have low floats.

On 3/13/2015 El Pollo Loco (LOCO) closed up 12.9% on the back of their earnings announcement the previous night on 5 times its average daily volume.  I consider a 12.9% move an outsize gain.  LOCO reported revenues of $90 million versus $76.2 million a year ago, an increase of 11.9%, EPS came in at .12 cents a share versus a loss of -.63 cents a year ago.  Total revenues for the year came in at $344 million vs $314.7 million the previous year an increase of 8.1%.  Based on Pollo Loco’s stock reaction the street loved and was surprised by the numbers.

Since its huge one day gain LOCO has pulled back on very low volume, digesting its gains.  Yesterday the stock printed an inside day (the high and low is inside the previous day’s candle) on the lowest volume since the breakout day, the stock traded 900k shares.  The inside day along with the low volume tells me that the digestion of the earnings gap up is probably done.  However, I’m not willing to anticipate that without some sort of confirmation.  A move above $26.20 today will confirm to me that the stock is ready to continue its drift higher.

Photo; Findery

[skrisiloff]

Here’s what CEOs were saying about the economy this week

Each week I read dozens of transcripts from earnings calls and presentations as part of my investment process. Below is a weekly post which contains some of the most important quotes about the economy and industry trends from those transcripts. Click here to receive these posts weekly via email.

The Macro Outlook:

It's a good time to be a consumer in the US

"with relatively inexpensive energy prices, little to no inflation, and a strong U.S. dollar, we see a positive environment in the United States for consumer spending." ($URBN)

Restaurants are feeling good

"the mood for the commercial foodservice is very strong...I think that we will continue seeing foodservice doing extremely well." ($MIDD)

Businesses are back to investing in their futures

"31% of all foodservice operators according to F&S report and research are expecting to increase their budget for equipment by renovating their kitchen " ($MIDD)

"During the quarter we have made significant investments for our future growth that are reflected in our results." ($JMBA)

Carrefour is seeing stability come back to Europe

"In Europe, in 2014, sales stabilized after several years of drop. This is a performance which has been brought about by the recovery in Spain combined with a good stability in the other countries and this is particularly true in the fourth quarter." ($CRRFY)

But they are seeing frugality in China

"in Asia, organic sales have gone down and now that reflects a more frugal style of consumption in China and there is no sign that this trend is going to change in the fourth quarter...since the third quarter of 2013, China has become more frugal is the word they use themselves in China" ($CRRFY)

Volkswagen is seeing a "critical" environment in Brazil

"Our comments with Brazil, which saw a multitude of factors creating a less optimistic forecast or assessment of the market, first of all, you’ve got the economic development and trends, which are critical. Interests have risen sharply and consequently individual customers find it increasingly difficult to finance their purchases. At the same time the government programs...have been phased out at end of the year...And there is unrest in the country, so that we assess the situation as critical to tell you the truth, and the markets are contracting.' ($VLKAY)

Russia is in critical condition too. Inflation led to a buying panic, but now those sales will turn negative

"We’ve seen the economic downturn, which continues accelerate even, that contraction up until the end of last year. We had the almost expected inflation run, let me put it that way. Customers said simply before I leave the money in my pocket [I'd rather] buy something, a product, a good which makes sense anyway to compensate for inflation. This is led to upfront purchases, proactive purchases up until the end of December. That brings us to a critical situation with negative growth rates throughout the market.' ($VLKAY)

Russia usually rebounds quickly after a downturn though

"Russia reacts very quickly after economic downturns after going through the bottom – it recovers then very quickly and we’ll be ready for that." ($VLKAY)

Consumer:

Backlog at west coast ports will take months to clear

"As we mentioned, we’re closely monitoring the residual effect of the West Coast port slowdown and the impact on our seasonal merchandise receipts. The good news is that a tentative agreement has been reached, but it will take months to clear the backlog." ($DG)

Is there a restaurant bubble forming? Everyone wants to open up fast casual restaurants right now

"Today everyone wants to be the Five Guys or the Pot Bellies, even star chefs like David Chang, Roy Choi’s, Danny Meyers are joining the fray by opening fast casual...Those concepts have capital to grow; they can open a lot of stores." ($MIDD)

El Pollo Loco calls them "quick service plus"

"We define QSR-plus as offering the high quality food and dining experience you’d expect at a fast casual restaurant combined with the speed convenience and value you’d find at a traditional quick service restaurant essentially getting the best of both worlds." ($LOCO)

Americans love their pizza

"If Americans would choose to eat only one food for the remainder of their lives, I will assure you it has to be pizza. Americans eat an average 100 acres of pizza daily or 350 slice per second...pizza is a $40 billion industry in the U.S. and it makes up approximately 17% of all restaurants in the nation' ($MIDD)

Pizza companies have done a great job of leveraging social media

"the pizza business and the segment has been the first to innovate in social media...They have been very, very strong in outdoing their marketing strategies for website and e-commerce." ($MIDD)

Social media isn't just about building a brand, it's about building an audience

"We are not simply a brand selling products. We are attracting an audience that wants to be part of our culture through our product offering, music, photography, and other creative outlets." ($URBN)

Good marketing has always been about attracting a community or audience though. Barnes and Noble has attempted to stay afloat by making their store a physical gathering place for their community

"through our one-of-a-kind in-store events, we have further reinforced Barnes & Noble as a destination for the communities that we serve.' ($BKS)

Some consumers still prefer physical stores. The French are apparently one example

"Physical contact creates trust and this is something that cannot be replaced elsewhere. According to our recent study, the store is the channel preferred by 68% of people in France." ($CRRFY)

Technology:

The PC and tablet markets are very soft

"the negative 4% for Q4 in stores that was I would say entirely driven by tech...essentially the decline in PCs, PC peripherals and actually the tablet business. So, it’s a little bit worse in Q4 than we expected and we have seen in other quarters, but essentially that was the cause of the entire miss." ($SPLS)

Staples' big competitors in B2B office supply sales are now Grainger and Amazon

"Obviously Grainger is selling office supplies these days. Amazon has just launched their B2B offering. We have got some credibly strong regional players. And there are a lot of even large companies that buy from local mom and pops, and there are thousands of them out there.' ($SPLS)

Healthcare:

El Pollo Loco doesn't expect to see any impact from the Affordable Care Act in 2015

"As we have mentioned previously we do not expect these to be significantly impacted by Affordable Care Act in 2015 as the health insurance program was already fully compliant with the Act prior to its implementation." ($LOCO)

Miscellaneous Nuggets of Wisdom:

You need to remodel a restaurant about once every seven years in order to keep the store fresh

"In our franchise agreement it calls for remodeling every seven years... as we reported [remodeling drives] about a 3% incremental sales on top of what they are already getting. But the customer satisfaction is putting the brand where it needs to be today" ($LOCO)

Creating an emotional link with your customer gives you pricing power

"you can go into a Forever 21 and they have some stripe tops in there right aisle for under $11, and you could then go someplace else in the mall and find Michael Kors that has the similar top for $50, but they cost probably relatively the same to make, of course, probably a little bit more, but still it’s relatively the same. But, the Kors can get the $50, because of the value proposition. So our job as merchants is to create that emotional link with the customer and get the value proposition up and that will support a full price." ($URBN)

Full transcripts can be found at www.seekingalpha.com