BloggingStocks

Papa John's: clicking a billion

Tom Taulli — 2008-05-08T17:39:00+00:00

A friend of mine -- who recently came to LA -- ordered a Papa John's Int'l, Inc. (Nasdaq: PZZA) pizza. She used the Internet. All in all, it was pretty efficient.

Well, according to a recent report, Papa John's has sold about $1 billion in pizzas (over the past seven years). That's certainly a lot of dough, huh? And, as should be no surprise, the growth rate has been stunning: about 50% per year.

There is lots of competition, such as Dominos Pizza (Nasdaq: DPZ) and Pizza Hut. And interestingly enough, Pizza Hut plans to launch a web-enabled widget so you can get pizza at super-fast speeds (I'm sure this will be a big hit for Web 2.0 programmers, who tend to eat pizza at about 2 a.m.).

But, as my friend has experienced, there are some glitches. Ordering online it took two hours for her to get her pizza.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Battle of the Brands: Pizza Hut vs. Domino's

Tom Barlow — 2008-05-07T17:00:00+00:00

Filed under: Domino's Pizza (DPZ), Yum Brands (YUM), Battle of the Brands

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

How to compare the two dominant pizza brands, Yum! Brands Inc.'s (NYSE: YUM) Pizza Hut vs. Domino's Pizza Inc. (NYSE: DPZ)?

Most annoying ads? The wing man series by Pizza Hut is a recent annoyance, but Domino's still, in my mind, has not lived down the ignominy of its Noid commercials in the 1980s.

Most obscene side-dishes? What in the hell are dipping strips? Like we don't realize they're just pizza dough with goo indistinguishable from the plaque clogging our arteries. Bad Pizza Hut! Bad!

Size? Pizza Hut -- 12,800 outlets in 90 countries. Domino's -- 8,624 outlets in 55 countries.

Corporation? Domino's is dwarfed by Yum! Brands, owner of Pizza Hut as well as Taco Bell and KFC.

Taste? (Subjectivity warning) I'm rarely in the mood for tomato sauce smeared on cardboard, so I'm not a regular Domino's customer. In fact, I don't accept the notion that delivery pizza is anything but the sad yokel cousin of the real, hot from the oven pie. Since Domino's made its nut in the delivery business while Pizza Hut has sit-down locations, on this factor alone I declare the Hut the clear winner in this battle of the brands.

Vote in our poll for Pizza Hut or Domino's as your preferred brand, and let us know in the comments why you love it.

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12 ways to profit from the middle class recession diet

Peter Cohan — 2008-04-26T17:26:00+00:00

Filed under: Forecasts, Consumer experience, Wal-Mart (WMT), Starbucks (SBUX), Marketing and advertising, Money and Finance Today, Domino's Pizza (DPZ), Kohl's Corp (KSS), Ruth's Chris Steak House (RUTH), Economic data, Stocks to Buy, Stocks to Sell, Recession

The New York Times reports that Americans in the economic middle are eating pasta instead of meat and staying at Hampton's Inn instead of Hilton as they try to keep their families together in the face of flat income and skyrocketing costs. As a result, some companies are suffering and others are benefiting. Let's look at two that are benefiting and 10 that are hurting:

Here are two companies that are doing better thanks to their lower prices:

TJX Co.'s (NYSE: TJX)
Wal-Mart Stores, Inc. (NYSE: WMT)

Here are 10 that are hurting because people can't afford to go out to restaurants and buy expensive clothes:

Bob Evans Farms (NYSE: BOBE)
Denny's (NASDAQ: DENN)
Domino's Pizza (NYSE: DPZ)
J.C. Penney (NYSE: JCP)
Kohl's (NYSE: KSS)
Macy's (NYSE: M)
Morton's Restaurant Group (NYSE: MRT)
Ruby Tuesday (NYSE: RT)
Ruth's Chris Steak House (NYSE: RUTH)
Starbucks (NASDAQ: SBUX)

Investors may want to consider whether to invest in the winners and sell short or simply avoid the losers. And if you're among the pasta eaters -- you'll need to find an inexpensive way to exercise more. Comment below if you want help analyzing these stocks.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

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Analyst initiations: Analog semiconductors, VITA and FSLR

Eric Buscemi — 2008-03-28T11:45:00+00:00

Filed under: McDonald's (MCD), Alcoa Inc (AA), Domino's Pizza (DPZ), Yum Brands (YUM), Burger King Hldgs (BKC), Analyst initiations

MOST NOTEWORTHY: Analog Semiconductors, OrthoVita and First Solar were today's noteworthy initiations:

Morgan Stanley initiated Analog Semiconductors with an In Line rating. The firm assumed National Semiconductor Corp (NYSE: NSM) with an Overweight rating and $26 target and is the firm's top pick; Analog Devices (NYSE: ADI) and Linear Tech (NASDAQ: LLTC) were initiated with Equal Weight ratings and a $32 target and $34 target, respectively.
Barrington believes OrthoVita (NASDAQ: VITA) is the market share and technological leader of the biomaterials market. The firm assumed shares with an Outperform rating and $4 target.
Canaccord Adams believes First Solar's (NASDAQ: FSLR) management and business model are among the best of any PV company and that execution has led to strong profitability plus a successful aggressive capacity ramp. Shares were started with a Buy rating and $325 target.

OTHER INITIATIONS:

Morgan Stanley initiated Yum! Brands (NYSE: YUM) and Domino's Pizza (NYSE: DPZ) with Equal Weight ratings and targets of $40 and $15, and also initiated McDonald's (NYSE: MCD) and Burger King (NYSE: BKC) with Overweight ratings and targets of $65 and $34.
Lehman initiated Alcoa (NYSE: AA) with an Overweight rating and $44 target.

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Smart strategies for a rocky market, best CD rates & America's most miserable cities - Today in Money 1/30

Allan Halprin — 2008-01-30T08:55:00+00:00

Filed under: Yahoo! (YHOO), Wal-Mart (WMT), Money and Finance Today, Boeing Co (BA), Domino's Pizza (DPZ), NIKE, Inc'B' (NKE), Merck and Co (MRK), Under Armour'A' (UA), Kraft Foods'A' (KFT)

In the News:

· Fed Expected to Cut Rates Again at Meeting

· U.S. Economy Slowed Sharply in 4Q; GDP Slows to 0.6%

· UBS Takes $14 Billion Write-Off

· Yahoo Profit Falls 23%, Cuts 1,000 Jobs; Stock Plunges

· Yahoo's Yodel Turns Into a Whimper

· Merck's Earning Top Forecasts; Outlook Positive

· Boeing Net Income Rises

· Refinancings Fuel Mortgage Application Surge; Rates Up Slightly After Big Drop

· Kraft Foods Earnings Match Wall Street Expectations

· Under Armour to Battle Nike, Adidas on Athletic Shoe Wall

· Wal-Mart to Hawk 'Hannah Montana' Merchandise

· Where's Your Domino's Pizza? Track It Online

· Godiva Chocolate Room Up For Grabs

Rocky Market, Smart Strategies
Indexing and dollar-cost averaging are always sound approaches to long-term investing, but right now they're especially timely.
Rocky market, smart strategies - MONEY

CDs Safe Haven? Where to Find the Best Rates
Has the wildly unpredictable stock market got you jittery? You can put your money into CDs instead. As long as they're insured, they're a sure bet. Here are some places where you can get the highest rates.
CDs Safe Haven? Where to Find the Best Rates - TheStreet.com

The 0% Capital Gains Tax
This could prove to be a bountiful year for taxpayers who play their cards right. That's because 2008 is the year that an unbelievable 0% federal income tax rate on long-term capital gains and qualified dividends kicks in. This special rate only applies to gains and dividends that fall in the 10% or 15% regular income tax bracket. But even if your income is too high to personally cash in on the 0% rate, you may have children, grandchildren, or other loved ones who qualify. Here's how it works.
Take Advantage of 0% Cap Gains Before It's Too Late | SmartMoney.com

America's Most Miserable Cities
Imagine living in a city with the country's highest rate for violent crime and the second-highest unemployment rate. As an added kicker you need more Superfund dollars allocated to your city to clean up contaminated toxic waste sites than just about any other metro. Detroit grabs the top, or should we say bottom, spot on Forbes' inaugural list. Stockton, Flint, New York City and Philadelphia round out the top 5 miserable cities.
America's Most Miserable Cities - Forbes.com

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Will the Fed need to cut interest rates yet again?

Jonathan Berr — 2007-10-31T15:17:00+00:00

Filed under: Major movement, Merrill Lynch (MER), Domino's Pizza (DPZ), Economic data, DJIA, Federal Reserve

As expected, the Federal Reserve today cut its key interest rate by one-quarter point to 4.5%. Is this a pause or a hint of more cuts to come?

Unlike Alan Greenspan, Chairman Ben Bernanke doesn't go for grand gestures, but as the accompanying statement indicates, policy makers are concerned about the financial markets. The statement, which had a dissent from a member that didn't want any rate cut, mentions that increased energy prices may put "renewed upward pressure on inflation," but did mention that economic growth was "solid" and that strains on financial markets had eased "somewhat on balance."

At first, the stock market didn't know what to make of the Fed's move. The Dow Jones Industrial Average bounced around in the minutes following the release of the statement. Eventually, Wall Street decided that it liked what the Fed had to say and sent the Dow Jones industrial average higher by triple digits. Maybe people were expecting more cuts to come, though that's far from a certainty.

Some pundits seemed to expect a 50-basis-point cut. The Fed has already done quite a bit. As Bloomberg News notes, "Policy makers have now lowered their target rate for overnight loans between banks by 0.75 percentage point in six weeks, the most aggressive easing since the economy was emerging from its last recession in 2001."
As I've said before, Bernanke is a believer in tough love. He doesn't want to reward people who made foolish bets on the real estate market. But Wall Street is in a downward spiral as companies, including Merrill Lynch (NYSE: MER) took gigantic write downs in the past quarter.

So should Bernanke make Wall Street clean up its own mess? Opinion is divided.

"No, these sycophants did not do the right thing," wrote one poster on the Wall Street Journal's Economics Blog. "They caved again to market pressure. Unfortunately, only time will show how they have debased the currency and unleashed inflation. Unlike the 70s, many more people will know the true cause of the misery."

For now, the economy is a mixed bag. Housing remains a mess. Corporate earnings were conflicted, as consumers bought expensive Apple (NASDAQ: AAPL)'s iPods but not cheap Domino's Pizza (NYSE: DPZ), while they face the potential of $100-per-barrel oil! How odd.

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Earnings highlights: Tech stocks strong, financials weak

Trey Thoelcke — 2007-10-20T12:40:00+00:00

Filed under: Earnings reports, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), eBay (EBAY), Pfizer (PFE), Coca-Cola (KO), Intel (INTC), Motorola (MOT), McDonald's (MCD), International Business Machines (IBM), Nokia Corp. (NOK), Citigroup Inc. (C), Johnson and Johnson (JNJ), JPMorgan Chase (JPM), Advanced Micro Dev (AMD), Altria Group (MO), Bank of America (BAC), Boston Scientific (BSX), Hershey Co (HSY), Domino's Pizza (DPZ), Gannett Co (GCI), Mattel, Inc (MAT), Southwest Airlines (LUV), Wachovia Corp (WB), Washington Mutual (WM), Harley-Davidson (HOG), United Technologies (UTX)

Another earnings season crunch is under way, and here are a some highlights of this past week's earnings coverage here at BloggingStocks:

Advanced Micro Devices (NYSE: AMD) reported losses 9 cents greater than Wall Street estimates.
Altria Group Inc.'s (NYSE: MO) profits were down, but the company raised its full-year earnings guidance.
Bank of America Corp. (NYSE: BAC) fell short of expectations, profits down 32%.
Boston Scientific Corp. (NYSE: BSX) almost tripled Wall Street's earnings estimates.
Citigroup Inc. (NYSE: C) had warned to expect a disappointing results, and earnings per share fell 57%.
Coca-Cola Co. (NYSE: KO) beat estimates, sending the share price to a 52-week high.
Domino's Pizza Inc. (NASDAQ: DPZ) fell short of expectations, profits falling 55%.
eBay Inc.'s (NASDAQ: EBAY) otherwise good results were hurt by Skype-related losses.
Gannett Inc.'s (NYSE: GCI), earnings beat expectations but revenue fell short.
Genetech Inc. (NYSE: DNA) beat estimates by a penny, but analysts' concerns linger.
Google Inc. (NASDAQ: GOOG) had a spectacular third quarter. See our live blog of the conference call.

Harley-Davidson Inc. (NYSE: HOG) reported a profit loss, but managed to beat low EPS expectations.
The Hershey Co. (NYSE: HSY) missed expectations, due in part to rising dairy costs.
IBM's (NYSE: IBM) results were solid, beating analysts' expectations by a penny.
Intel Corp. (NASDAQ: INTC) beat expectations, revenue up 15%.
Johnson & Johnson's (NYSE: JNJ) profits fell, hurt largely by restructuring costs.
JPMorgan Chase Co. (NYSE: JPM) earnings per share rose 5%, beating expectations by seven cents.
Mattel Inc.'s (NYSE: MAT) earnings were affected by the recent toy recalls, though sales rose modestly.
McDonald's Corp. (NYSE: MCD) beat expectations and continued its streak of same-store sales growth.
Nokia Corp.'s (NYSE: NOK) 85% profit rise was due in part to sales in emerging markets.
Pfizer Inc. (NYSE: PFE) suffered a profit loss of 77%, due in part to increased competition in generic drugs.
Southwest Airlines (NYSE: LUV) beat expectations by a penny, but the share price dropped nonetheless.
United Technologies Corp. (NYSE: UTX) beat expectations, revenue up 14%.
Wachovia Corp. (NYSE: WB) was also hit by the credit crunch and missed expectations.
Washington Mutual Inc. (NYSE: WM) suffered a 72% drop in profit, due largely to home loan difficulties.
Yahoo! Inc. (NASDAQ: YHOO) beat Wall Street expectations, revenue up 12%.

Jonathan Berr wonders if Yahoo!, Intel, and IBM reports signal strength in the tech sector, and the markets seem to bear out confidence in tech stocks. Georges Yared predicts that Google will surpass Microsoft Corp. (NASDAQ: MSFT) to become the biggest tech company in the world. Meanwhile, Jim Cramer would like to see Motorola Inc. (NYSE: MOT) and Ericssen (NYSE: ERIC) team up in light of the latter's disappointing results.

When all was said and done, the accumulation of disappointing results and bad news took its toll on the markets.

Upcoming results to watch for include: Apple Inc. (NASDAQ: AAPL), AT&T (NYSE: T), Amazon.com Inc. (NASDAQ: AMZN), Boeing Co. (NYSE: BA), Merck & Co. (NYSE: MRK), Merrill Lynch & Co Inc. (NYSE: MER), Microsoft Corp. (NASDAQ: MSFT), Motorola Inc. (NYSE: MOT), and XM Satellite Radio Holdings Inc. (NASDAQ: XMSR).

Visit AOL Money & Finance for more earnings coverage.

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Stock market plunges as bad news mounts

Jonathan Berr — 2007-10-19T16:19:00+00:00

Filed under: Major movement, Earnings reports, Forecasts, Bad news, Google (GOOG), Caterpillar (CAT), Schlumberger Limited (SLB), Hershey Co (HSY), Domino's Pizza (DPZ), Black Friday, Harley-Davidson (HOG), Economic data, Commodities, Oil, S and P 500, DJIA, Housing, Federal Reserve

The stock market had its biggest drop today in a month as investors absorbed a plethora of earnings disappointments, cuts in profit outlooks and pessimistic comments about the economy.

The statistics speak for themselves. The Dow Jones industrial average fell more than 340 points. Bloomberg News notes that, "Ten industry groups in the S&P 500 decreased today, with 458 of the index's members posting declines. Thirteen stocks dropped for every one that gained on the New York Stock Exchange."

Bad news was so plentiful today that it's tough to single out one reason for the market's sell-off.
Caterpillar Inc. (NYSE: CAT) reported disappointing results and lowered its earnings forecast. Honeywell Inc. (NYSE: HON) spooked investors with talk of slowing growth. Shares of Schlumberger Ltd. (NYSE: SLB) fell after the oil field services company said it drilling projects would be delayed. Even shares of 3M Co. (NYSE: MMM), which reported better-than-expected results, got sucked into the downward spiral as investors were concerned about a planned price cut for its optical films.

Then there's the continued worry about consumer spending that hurt companies ranging from Harley-Davidson Inc. (NYSE: HOG) to Domino's Pizza Inc. (NYSE: DPZ) to Hershey Co. (NYSE: HSY) this week. Financial shares continue to get pummeled on concerns about the subprime mortgage meltdown. Wachovia Corp. (NYSE: WB) reported ugly earnings earlier today. About the only sector that seems to be holding on is tech, thanks to yet another blowout quarter from Google Inc. (NASDAQ: GOOG).

Wall Street isn't just worried about the future, it's nearly petrified waiting for the next shoe to drop from the flow of earnings reports coming over the next few weeks. Pundits, such as David Joy of RIverSource Investments, weren't expecting things to get better anytime soon.``When you have earnings expectations that are negative going into the third-quarter reporting season and you start to get some disappointments on top of that after five years of double-digit earnings growth, this market's going to struggle,'' Joy told Bloomberg News.Worst of all, the decline came on the 20th anniversary of the 1987 crash., further jolting the market's already fragile psychology. Investors can't help but compare and contrast. People are now freely using the dreaded "R" world.

"It's been a pretty tough day," Federated Investors market strategist Linda Duessel, told Reuters. "People are saying there could be a recession because Caterpillar gave some cautionary comments."

The ball now is squarely in the court of Fed Chairman Ben Bernanke. Is there a case for another rate cut at the end of the month? We'll have to wait and see. It gives a whole new meaning to the phrase "Trick or Treat."

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Stock market's Manic Monday leads to Twisted Tuesday

Jonathan Berr — 2007-10-16T14:02:00+00:00

Filed under: Major movement, Yahoo! (YHOO), Intel (INTC), Exxon Mobil (XOM), Middle East, International Business Machines (IBM), Domino's Pizza (DPZ), D.R.Horton (DHI), Wells Fargo (WFC), Commodities, Oil, S and P 500, DJIA, Delta Air Lines (DAL), ValueClick Inc (VCLK)

Manic Monday meet Twisted Tuesday.

The Dow Jones industrial average is down 85 points to 13,899, rebounding from earlier lows (1:15 p.m.). The market is moving for lots of reasons including Ben Bernanke's pessimistic view of the housing market and a drumbeat of disappointing results from companies including Wells Fargo & Co. (NYSE: WFC) along with comments from home-builder D.R. Horton Inc. (NYSE: DHI) indicating tighter availability of mortgages. Ericsson AB (NASDAQ: ERIC) plunged after reporting worst-than-expected results as did ValueClick Inc. (NASDAQ: VCLK).

I almost forgot to mention skyrocketing oil prices that seem headed to $100 per barrel and beyond, which helped push up the big oil companies including ExxonMobil Corp. (NYSE: XOM).

A better-than-expected earnings report from Johnson & Johnson (NYSE: JNJ) failed to lift shares of the health care company and investors pushed down the shares of Yahoo Inc. (NASDAQ: YHOO) and IBM Corp. (NYSE: IBM) ahead of their earnings reports due after the close. Domino's Pizza Inc. (NYSE: DPZ) fell after reporting a 55% decline in profit, prompting more worries about consumer spending.

Delta Airlines Inc. (NYSE: DAL) was a rare bright spot, reporting decent results. The airline, which has emerged from bankruptcy, also forecast rising fuel costs and a likely drop in operating margins. Anyone who is considering buying airlines stocks should lie down until the feeling goes away. The sector has burned countless investors over the years and will continue to do so for some time to come. Shares of E.W. Scripps Co. (NYSE: SSP) also rose after the media company announced plans to separate its newspaper business from its cable television holdings. Intel Corp. (NASDAQ: INTC), which also reports after the close, was trading up as investors continue to expect good things from the chipmaker.

Let me go out on a limb and predict that Twisted Tuesday will lead to Woeful Wednesday, Turbulent Thursday and Freaky Friday. Fasten your seatbelts, it's going to be a bumpy ride.

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Domino's Pizza (DPZ) Q3 profit plunges 55 percent

Brian White — 2007-10-16T10:22:00+00:00

Filed under: Earnings reports, Bad news, Domino's Pizza (DPZ)

Domino's Pizza, Inc. (NYSE: DPZ) saw its Q3 profit drop by a staggering 55% as reported this morning. Domino's management explained the root causes as weak consumer spending added with cost pressures. Cost pressures? Apparently, either the cost of making pizza has changed big-time in the last three months, or gas prices and commodity food product prices have gone up. I'll take the latter -- you?

For the Q3 period, Domino's net income dropped to $10.99 million or $0.17 per share from $24.5 million or $0.39 per share in the year-ago quarter. Most analysts expecting about $0.23 EPS. The food company's quarterly revenue rose 3.2% to over $337 million as international sales became the star of the quarter. CEO David Brandon suggested that trying to mix increasing prices with declining traffic was a challenge in the quarter. Also mentioned was ... wait for it ... higher food costs. Milk prices (cheese) indeed went up, but at the butt-end of Q3, not during the whole period. Could this be an excuse?

While weak domestic consumer spending hampered sales, international sales did just the opposite, increasing 8.3% for the quarter. Have Domino's done enough in the Q3 period to goose more sales from customers, if that was even possible? I'll say that Papa John's International (NYSE: PZZA) advertised like crazy in my area this past quarter -- on television, newspapers and in other areas. I saw next to nothing from Domino's. I wonder if the company is masking "declining sales" with "losing business to the competition?"

Visit AOL Money & Finance for more earnings coverage

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Analyst initiations 9-5-07: LULU, DPZ, KNXA, OMTR and NWS

Eric Buscemi — 2007-09-05T11:22:00+00:00

Filed under: Analyst reports, Whole Foods Market (WFMI), Domino's Pizza (DPZ), News Corp'B' (NWS), Analyst initiations

MOST NOTEWORTHY: Lululemon, Domino's Pizza, Kenexa, Omniture and News Corp were today's noteworthy initiations:

Lululemon (NASDAQ: LULU) was initiated with a Neutral rating at Merrill Lynch. CIBC believes the company is well-positioned to replace its Canadian success in the U.S. market and started shares with a Sector Outperformer rating and $39 target. The stock was started at Wachovia with a Market Perform rating on valuation.
Citigroup finds Domino's Pizza (NYSE: DPZ) compelling for long-term investors given the company's solid cash flows, above-average margins, and international growth opportunity. The firm initiated shares with a Buy rating and $22 target.
RBC Capital started shares of Kenexa Corporation (NASDAQ: KNXA) with a Sector Perform rating and $32 target, citing lack of visibility into the company's product roadmap.
RBC initiated shares of Omniture Inc (NASDAQ: OMTR) with an Outperform rating and $33 target. The firm believes Omniture is well-positioned given cross selling opportunities, best in class products, strong secular trends, and expanding client roster.
News Corporation (NYSE: NWS) was initiated with a Buy rating and added to Stifel's Select List. The firm believes the FOX TV Network, stations and FOX News can garner an incremental recurring 100% margin retransmission and affiliate fees totaling $1B by 2010, adding that its sum-of-the-parts model for News Corp captures the value of $8B of "hidden" assets, yielding a fair market value of $30-$31.

OTHER INTIATIONS:

CRT Capital initiated shares of Navistar (NASDAQ: NAVZ) with a Buy rating and $75 target.
JP Morgan started shares of Dice Holdings (NYSE: DHX) with an Overweight rating.
Think Equity started shares of Whole Foods Market Inc (NASDAQ: WFMI) with an Accumulate rating and $51 target.

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Option update 8-2-07: Morningstar.com volatility flat as Morningstar.com increases 19% on 44% increase in Q2 revenue

Paul Foster — 2007-08-02T18:02:00+00:00

Filed under: Earnings reports, Good news, Management, Apple Inc (AAPL), Home Depot (HD), Citigroup Inc. (C), Domino's Pizza (DPZ), Countrywide Financial (CFC), Options

Morningstar.com, Inc. (NASDAQ-MORN) volatility was flat as MORN rallied 19% on 44% increase in second quarter revenue. Morningstar.com, a provider of independent investment research, was recently up $10.02 to $58.93. MORN reported a second quarter earnings per share (EPS) of 38 cents verses a consensus estimate of 35 cents. MORN reported consolidated Q2 revenue of $109 million, up 44% from Q2 2006. MORN generated $32.2 million in Q2 free cash flow. MORN September option implied volatility of 32 is near its 26-week average according to Track Data, suggesting non-directional risks.

Volatility Index S&P 500 Options: VIX down 2.41 to 21.26.

Option volume leaders today were: The Home Depot, Inc. (NYSE: HD), Apple, Inc. (NASDAQ: AAPL), Countrywide Financial Corporation (NYSE: CFC), Dominion Resources, Inc. (NYSE: D), and Citigroup Inc. (NYSE: C) according to Track Data.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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Burger King and the saga of the 'trademark' chips

Kevin Shult — 2007-07-27T16:45:00+00:00

Filed under: Products and services, Launches, Industry, Consumer experience, Competitive strategy, Wal-Mart (WMT), Marketing and advertising, McDonald's (MCD), Walgreen Co (WAG), Domino's Pizza (DPZ), Yum Brands (YUM), Wendy's Intl (WEN), Burger King Hldgs (BKC)

Burger King (NYSE: BKC) has licensed its brand name for a line of chips to Inventure Group (NASDAQ: SNAK), USA Today reports. This fall, junk-food lovers can try new Ketchup & Fries or Flame-Broiled burger-flavored chips. "It's a fun fit," BK's chief marketer, Russ Kline, says. "This makes great sense for us. When you think about the sheer impressions of our trademark that this will create, the value is gigantic."

"Fun" fit? "Gigantic" value?

This looks like a direct marketing campaign to get children attached to the BK brand name. While the chips, sold in two-ounce and five-ounce packs, are expected to sell in stores, Inventure Group plans to market a one-ounce, 100-calorie pack in vending machines.

"We've got our own business objectives," Kline says. "You'll never see me interested in how Burger King Ketchup & Fries stacks up against Doritos in some Nielsen report."

Is it a stretch to think this is a direct attempt to attract kids? Is it also a stretch to think the new 100-calorie packs could be marketed for America's schools?
No one is immune to the pressure to buy food, according to Marion Nestle, professor and chair of the department of nutrition and food studies at New York University. Companies use sophisticated marketing strategies to introduce children to their products. "You can even buy textbooks on how to market to children," she says.

Is it that the "King" is unable to pull in enough business with its Flame-broiled Whopper? Not really. Burger King is attempting to get its name into the supermarkets of Walgreens (NYSE: WAG) and Wal-Mart (NYSE: WMT).

Everyone knows competition is fierce in the fast-food business. McDonald's (NYSE: MCD), Wendy's (NYSE: WEN), Domino's (NYSE: DPZ) and Yum! Brands' (NYSE: YUM) KFC, Pizza Hut and Taco Bell are all fighting for the fast-food dollar. To compete, BK plans to keep many of its stores open to midnight or later, seven days a week. In an attempt to get customers into stores before the sun comes up, BK has introduced the new BK Breakfast Menu. Burger King also plans to focus abroad for 80% of its growth over the next few years, according to CEO John Chidsey, where the chain trails Yum! Brands and McDonald's.

Regardless of Burger King's objectives, there is at least one marketing expert that thinks licensing for chips won't do much. "It is so far out of the Burger King brand domain," Rob Frankel, author of the book The Revenge of Brand X, told USA Today. "Just because you can do it, doesn't mean you should do it." Remember that when you pass by the new BK chips at your local grocer.

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Will private equity take away your job?

Tom Taulli — 2007-05-16T18:20:00+00:00

Filed under: Private equity, Domino's Pizza (DPZ), TXU Corp (TXU), First Data (FDC)

Today, I met with a friend who is involved in a business that provides background checks on employees. He said the business is doing well - except for the Fortune 500 customers. Why? Perhaps these companies are cutting back jobs.

And, could that be the result of private equity? After all, with large amounts of capital, private equity firms are targeting mega companies like TXU (NYSE: TXU) and First Data Corp (NYSE: FDC). What's more, private equity deals often involve job cuts.

Well, Congress is thinking about these issues and even had a hearing today.

The president of SEIU (Service Employees International Union), Andy Stern, made a presentation against private equity. He thinks the deals are too risky and are mostly quick flips - which lead to income inequality.

He makes the following analogy: With the $4.4 billion in fees for the ten largest buyout deals, Congress could provided health plans for one million workers.

You can get more information at BehindTheBuyouts.org.

As for the private equity point of view, there was a presentation from Douglas Lowenstein. He operates the newly formed association called the Private Equity Council.

His argument? Well, it's that the high returns generated from private equity firms ultimately benefit Americans, such as through pension funds, insurance companies and college funds. Private equity has also helped improve companies like Dunkin' Donuts, Toys R. Us, Domino's Pizza (NYSE: DPZ), MGM Studios, and J. Crew (NYSE: JCG).

No doubt, private equity is becoming a political issue. Although, I think it's still not at a "hot button" state yet. But, if we start to see more and more layoffs, it certainly will be.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

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Analyst downgrades 4-19-07: BBI, BP, CPWR, DPZ and NFLX downgraded today

Kevin Shult — 2007-04-19T11:36:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Bad news, Netflix, Inc. (NFLX), Blockbuster Inc 'A' (BBI), Compuware Corp (CPWR), Domino's Pizza (DPZ), BP p.l.c. ADS (BP)
MOST NOTEWORTHY: Netflix, Inc (NFLX), Blockbuster Inc (BBI), The Mosaic Company (MOS) and Domino's Pizza, Inc (DPZ) were some of today's noteworthy downgrades:

First Albany cut Netflix Inc (NASDAQ: NFLX) to Neutral from Buy to reflect weak industry subscriber additions.

Blockbuster Inc (NYSE: BBI) was downgraded to Hold from Buy at Soleil.

Citigroup cut The Mosaic Company (NYSE: MOS) to Sell from Hold on expectations for a sharp DAP price decline and valuation.

Domino's Pizza Inc (NYSE: DPZ) was downgraded to Peer Perform from Outperform at Bear Stearns, citing valuation.

OTHER DOWNGRADES:

Merrill Lynch downgrade BP Plc (NYSE: BP) to Neutral from Buy on valuation.

Smith Micro Software, Inc (NASDAQ: SMSI) was cut to Hold from Buy with a $21 target.

Pacific Crest downgraded Linear Technology Corp (NASDAQ: LLTC) to Sector Perform from Outperform based on secular headwinds and an increase in DOI to 82 days.

Tsakos Energy Navigation Ltd (NYSE: TNP) was downgraded to Sell from Hold at Citigroup on valuation.

Piper Jaffray downgraded Compuware Corp (NASDAQ: CPWR) to Market Perform from Outperform following the disappointing Q4 guidance.

Brean Murray downgraded Komag, Inc (NASDAQ: KOMG) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

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Analyst initiations 3-15-07: MasterCard & Domino's Pizza initiated today

Kevin Shult — 2007-03-15T11:16:00+00:00

Filed under: Before the bell, MasterCard Inc'A' (MA), Domino's Pizza (DPZ), Analyst initiations
MOST NOTEWORTHY: MasterCard Inc (MA), Domino's Pizza, Inc (DPZ), STEC, Inc (STEC) were some of today's more notable initiations:

Suntrust initiated MasterCard Inc (NYSE: MA) with a Buy rating and $130 target, believing the company is the best positioned to benefit from the secular shift from cash to e-payments at the point of sales.

Domino's Pizza Inc (NYSE: DPZ) was initiated with an Outperform rating and $38 target at Friedman Billings.

AG Edwards initiated STEC Inc (NASDAQ: STEC) with a Buy rating and $12 target. The firm feels shares are undervalued and that the company's growth profile and profitability should dramatically improve post-consumer business sale and revenue recognition change.

OTHER INITIATIONS:

California Pizza Kitchen (NASDAQ: CPKI) was initiated with a Market Perform rating and $35 target at Friedman Billings.

Stanford believes Watts Water Technologies, Inc (NYSE: WTS) is one of the more compelling names in the water infrastructure space and initiated shares with a Buy rating and $42 target.

Morgan Keegan believes Horizon Lines Inc's (NYSE: HRZ) earnings potential has yet to be realized and initiated shares with an Outperform rating.

Lazard initiated several solar power companies with Buy ratings: SunPower Corp (NASDAQ: SPWR), First Solar, Inc (NASDAQ: FSLR), Evergreen Solar, Inc (NASDAQ: ESLR) and Energy Conversion Devices, Inc (NASDAQ: ENER).

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

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Stocks with attitude: WEN, MCD, CAKE, DRI, DPZ, YUM

Victor Schiller — 2007-02-05T12:38:00+00:00

Filed under: Before the bell, Major movement, McDonald's (MCD), Domino's Pizza (DPZ), Darden Restaurants (DRI), Yum Brands (YUM), Wendy's Intl (WEN), Cheesecake Factory (CAKE), Options
Companies start to believe their own PR hype. Investors push a stock past logical limits. A company seems about to break down or break out. These are just a few things that can signal a stock with attitude. And... that attitude can be good or bad for the stock price, since attitude always catches up with reality. At least on Wall Street, that is.

Wendy's (NYSE:WEN) was down $0.73 (2.11%) last Friday to close at $33.11 on more than three times the stock's average volume. Investors were disappointed when the company announced earnings fell nearly 90 percent in the fourth quarter following the spin-off of its Tim Hortons coffee-and-doughnut chain. The technicals for WEN have been negative and the company has a an S&P 2 STAR (out of 5) sell rating with a 12-month price target of $26. Out of the 12 other analysts who cover the stock, one gives it a strong buy, one a moderate buy, nine a hold, and one gives it a moderate sell rating.

Since October 2006, Wendy's stock has stayed in a trading range between about $31 and $36. Investors don't seem eager to load up on this stock with talk of healthier fast foods starting to get louder. New York City's recent requirement that trans fats be eliminated may catch on in other cities causing some added complication to Wendy's operations.

Stocks for other companies serving up fast food to the masses like McDonald's (NYSE:MCD), Cheesecake Factory (NASDAQ:CAKE), Darden Restaurants (NYSE:DRI), Domino's Pizza (NYSE:DPZ) and Yum Brands (NYSE:YUM) may may also come under downward pressure in the coming months. Cheesecake Factory's premium menu and pricing may insulate it for a while and CAKE is the only stock here with an S&P 5 STAR Strong Buy rating.

For a bearish hedged play on Wendy's, I would consider a March bear-call credit spread above the 35 level.
Vic Schiller is an analyst with attitude at Investors Observer. DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

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Cramer hot hot HOT for Chipotle Mexican Grill: 'burrito investing'

Jon Ogg — 2006-11-09T18:24:00+00:00

Filed under: After the bell, Analyst reports, Chipotle Mexican Grill'A' (CMG), Domino's Pizza (DPZ)
Tonight Jim Cramer took a page from a TV man oh-so-like himself and kicked it up a notch! For his second feature stock on CNBC's MAD MONEY, Cramer got hot and bothered over Chipotle Mexican Grill, Inc. (NYSE:CMG). What about pizza? Cramer says it's "out," after all, look at California Pizza Kitchen, Inc. (NASDAQ:CPKI), which is down 10% at $28.35 after-hours because of cautioning that its outlook wasn't quite so tasty despite a great third quarter. When pizza is out? Fast Mexican food is in.

See, Cramer isn't just an investor. He's also a food critic. And this is a case where the food critic and the investor can come together for "burrito investing." Cramer said he was in denial that pizza sales were down and he thought it was maybe just a Domino's Pizza, Inc. (NYSE:DPZ) issue, but he was wrong. Domino's had had same store sales declines since Q4 of last year. Before Cramer even mentioned CMG the stock gapped over 2% to $58.00 in after-hours trading on NYSE/Archipelago trading.

Cramer calls burritos "the new pizza." Stay away from names like Papa John's Int'l, Inc. (NASDAQ:PZZA), says Cramer, as people are leaving for "Taco John's." Also of note in the hot Mexican trend is Jack in the Box Inc. (NYSE:JBX) for its Qdoba Mexican Grills (3% of JBX business), which he said that the place wasn't bad. Cramer said he is hesitant to be a BUY BUY BUY, but it has come down a bit. Cramer said that salsa is now the number 1 condiment in America. Cramer said you may never replace pizza in America, but investors need to be in burritos as people are eating more Mexican food than pizza. CMG & JBX are trumping PZZA & DPZ.

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.

[Photo Shane Adams]

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