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Proprietary Data Insights Top Restaurants Stock Searches This Month
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Fast Food Wars: It’s No Longer A Battle Over Breakfast |
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It’s time to do something we love to do, yet haven’t done for a while. Check in with fast food restaurants and stocks. We’ve been too busy with housing, consumer debt, ETFs, dividend stocks and tech, particularly the best AI stocks to buy. That linkfest is a great intro to The Juice if you’re just joining us or want to suggest subscribing to a friend. Anyhow, fast food, which we arbitrarily decided to lump Starbucks into. Here’s a quick look at how the top five most-searched restaurant stocks in Trackstar, our proprietary sentiment indicator, have fared over the last year:
And the other names we’ll mention in today’s Juice:
QSR owns Burger King.
Yum! Brands owns Taco Bell.
Jack owns Jack in the Box! Remember when breakfast was the battleground in fast food? To some extent, it still is. However, late night has been taking on increasing importance. Placer.ai does interesting analysis of retail foot traffic. They looked at late nights—defined as visits between 10 p.m. and 4 a.m.—and discovered meaningful increases in traffic across the board. By the way, if you’re at a fast food place at three in the morning and you don’t work there or odd hours at another job, please tell us all about what happened leading up to that visit. Because we want to know. Apparently, you have company if you’re eating burgers and fries late night:
We were surprised by this, too. At all five chains, those numbers are up over the previous quarter. Taco Bell and Jack saw the biggest increases. Late night visits as a percentage of total visits increased by 29.9% at Taco Bell between Q1 and Q2 and by 23.1% at Jack. Not that we have ever been in this situation, but, after a night of drinking, there’s no doubt Taco Hell is the fast food joint we’re hitting up. And we have to think Jack’s recent late night push (we’ve seen the commercials) has something to do with trying to pump up its sagging stock price. As we have said before, we love tracking these stocks (because, let’s face it, we all love a little fast food from time to time), but we would stay away from most of them: If you’re a long-term investor, we think you should stop right there. There’s little use in owning fast food chains beyond these two behemoths. We’re not talking about the short-term. We’re talking about stocks you’ll take to your grave with you. Or keep as core holdings in your retirement portfolio. MCD and CMG are – again, any short-term noise aside – about as weatherproof from an economic standpoint as it gets. Definitely throw Starbucks and, maybe, Domino’s into the mix and you’re definitely good to go. Speaking of Starbucks … we included them for a reason. The chain released its pumpkin spice latte—the PSL, not to be confused with premium seat license—last month. And it’s crushing it. Starbucks saw a 25.1% increase in visits on PSL launch day this year compared to the same day in 2017. Visits on the Thursday (8/24) Starbucks did the launch beat the average daily visits on the previous ten Thursdays by 30.5%. The traffic sustained through PSL launch weekend. We would not be surprised to see a monster quarter from Starbucks. With the stock down about 4.5% YTD, weakness now and, if we’re wrong, on earnings, could present opportunity for long-term investors.
The Bottom Line: While it might be fun to say you own 100 shares of Jack in the Box, we don’t see much point in it. Not in a stock market with a zillion other options. We mean the stock’s not just down 14% over the last year, it’s down by about the same amount over the last five years. Why bother when you can enjoy McDonald’s (up 68% over five years), Starbucks (also up 68%), Chipotle (up 315%!) and Domino’s (up 34%). In these spaces, go with the leaders. Plain and simple. |
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