Wednesday, 30 December 2015

CBRL - increasingly vulnerable to upside

Whilst the main market closed moderately weak, one of the few bright spots was Cracker Barrel Old Country Store (CBRL), which opened a little lower (intra low $124.88), but which settled +0.4% @ $126.53. Near term outlook offers upside to the 135/140 zone.

CBRL, daily

CBRL, weekly


*Yes Brelsa, this post is entirely your fault!

The stock has had a real problem since making a marginal new historic high in July ($156.99). Aug' saw it flash-crash to $117.06... with a lower high of $151 in Sept'.

Since then..  broad weakness to the 126/123 zone though, and unless that breaks, CBRL looks more vulnerable to upside.. than downside in Q1 2016.

As a company.. income/balance sheet look good (cash/debt ratio look okay), gross/net profit margins are within industry standard... 6% net. That sure isn't much, but then.. that's the highly competitive restaurant trade.

see HERE for a basic overview.

Best guess...renewed upside to 135/140 zone in Q1.

It should be clear though, for sustained price action >140.. we'll need the sp'2200s.. and beyond.

Low fuel prices look set to continue across 2016, and that will no doubt help ALL retail/food outlets.

Broadly.. CBRL looks a fine company, although I can't say anything about the food, as there are no Cracker Barrels in the UK.

*I've no position, its not generally a stock/sector I follow, but as its gaining some increasing media/analyst attention, I'll likely periodically highlight it in the months ahead.