Eagle Eye Opener: No Free Lunch for Restaurant Chains Reporting Earnings; Toyota’s Shares Rebound After Yesterday’s Auto Recall Announcement

Eagle Eye Opener

No Free Lunch, Part II: When a Rising Tide Doesn’t Lift All Boats (Marketwatch)

Regular readers of Eagle Eye Opener received a news brief yesterday noting the rebirth of the business lunch — as well as the rebirth of profits in the companies most-often picked to host these lunches. The rising share prices of Darden Restaurants (DRI) and Yum Brands! (YUM), up 23 % and 14% so far this year, respectively, are examples of this uptick in dining-out demand. Think of today’s first brief as the second half of yesterday’s piece — but in a cautionary vein. Remember, other restaurant chains could be losing business to the winners.

Upscale restaurant chain Ruby Tuesday (RT) reported today that its fiscal first-quarter sales rose 1.6%, reflecting at best a modest participation in the lunch-bunch rebirth. But a closer look at the numbers shows RT’s Q1 earnings tumbling 16% — mainly due to costs associated with a protracted executive search, as well as the need to cut costs and to close down under-performing stores. With restaurant chains, investors need to look beyond the appeal of what is served on a platter and instead delve into the performance numbers to discover the most appetizing choices.

Invisible Recall Shows Some Automakers Back with a Vengeance in 2012 (Reuters)

Yesterday, Toyota Manufacturing Corp. (NYSE: TM) the world’s largest automaker announced a global recall of some 7.4 million cars. As an investor, you might be afraid that a recall of this magnitude would crush the company’s share price. But you’d be wrong. The TM shares dipped yesterday but less than 1.5%. The shares ended the day at $74.50 but they have rebounded today to trade close to $75 in the early afternoon.

Exclusive  PowerTrend Brief: Market Volatility Picks up as Corporate Earnings Reports Accelerate

In fact, if anything, the Toyota recall actually reinforces the fact that the Japanese-based auto maker, along with a number of its direct competitors, are having very strong years — as reflected in the following year-to-date percentage returns: TM is up 9.91% (despite seeing sales to China fall 48.9% year-on-year in September). General Motors Co. Even bigger increases in share price have occurred at GM), which jumped 17.8%, and Volkswagen (VW), which rose 23%.

Like This Article?
Now Get Mark's FREE Special Report:
3 Dividend Plays with Sky-High Returns

This newly-released report by a top-20 living economist details three investments that are your best bets for income and appreciation for the rest of the year and beyond.

Get Access to the Report, 100% FREE


img
previous article

With a whopping 16 holdings, the size of your Dividend Pro portfolio is once again getting too big for its britches. Frankly, it's tough for me to push out any of your positions from the portfolio, as I think they all have solid potential. Nevertheless, this week, let's say goodbye to PowerShares Emerging Mkts Sovereign Debt (PCY). Why you may ask? After all, the position is up over 14% on the year, and has offered equity-like returns, without the volatility. My only

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike Turner’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE