How to Trade the Great Chicken Wing Crash

Restaurant stocks are total dogs right now…

Take greasy grub purveyor Buffalo Wild Wings (NASDAQ:BWLD). Shares of “B-Dubs” crashed 18% Thursday after the company whiffed on revenue and earnings. The excuse for lackluster growth? Poor television scheduling…

“Management cited ‘a shift in the sports calendar resulting in one less week of football and fewer pay-per-view events than last year’ as sources of weakness,” Business Insider reports.

Hilarious. You can’t help but laugh at blame-game carousel when companies fail to impress analysts and investors on their big day.

So let me get this straight…

A few lousy football games tanked your quarter? I’m not buying it. And neither are investors, apparently. In fact, Buffalo Wild Wings results were so bad that even competitor Wingstop (NASDAQ:WING) dropped more than 4% on the day…

Flightless Birds...

If someone had locked me in a windowless room with no internet since August, and the first thing you showed me upon my release was this chart, I could only assume the worst bird flu epidemic in history swept across the country. Which got me thinking…

The past month has offered traders a sharp snapback rally. The S&P 500 is up double-digits over the past four weeks.

But some stocks have been left behind. And casual dining establishments like Buffalo Wild Wings have posted some scary losses recently. And it’s not just chicken wings falling from the sky. Everywhere I turn in this sector, stocks are getting flattened. Take a look for yourself:

Closing Time

These aren’t a bunch of soured IPOs you’re looking at here. No, these are some of the most established casual dining chains in the country—from the parent company of Outback Steakhouse to Ruby Tuesday. Just look at those losses. Looks like an EKG of someone on their way out the door…

Earlier this year I told you that Americans are eating out in record numbers. No one is stuck at home cooking dinner anymore. You might have even seen the deluge of new restaurant IPOs that have hit the Street over the past couple of years. That’s no surprise. What is surprising is how poorly this group of stocks has fared given these stats.

But you know how we roll here at Rude HQ. If the charts scream “RUN!” that’s exactly what we do…

So get ride of the wings. That’ll cure what ails ya…

Sincerely,

Greg Guenthner
for The Daily Reckoning

P.SIf you want to cash in on the biggest profits this market has to offer, sign up for my Rude Awakening e-letter, right here. Stop missing out. Click here now to sign up for FREE.

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