A Slam Dunk Setup?

Published on
December 6th, 2018
Duration
9 minutes

A Slam Dunk Setup?

Technical Trader ·
Featuring Louis Llanes

Published on: December 6th, 2018 • Duration: 9 minutes

Louis Llanes, CMT, founder of Wealthnet Investments, highlights the iconic quick-service-restaurant company Dunkin’ Brands, and explains why he sees huge upside potential in the coming year. He discusses the company’s fundamentals, examines the technicals and reviews how to make the trade. Filmed on December 4, 2018 in Englewood, Colorado.

Comments

  • MP
    Matthew P.
    10 December 2018 @ 07:52
    Thx for the coverage and analysis louis! Always enjoy your commentary
  • JM
    Jeff M.
    8 December 2018 @ 00:18
    Perhaps this is a dumb question, but is the RSI you reference different than the RSI 14? I believe RSI 14 is a momentum indicator that just compares current momentum to past momentum (not comparing to SP500). If I understood the one you reference compares DNKN momentum to SP500 momentum).
    • LL
      Louis L. | Contributor
      8 December 2018 @ 15:43
      I’m referring to the ratio of the stock price to the S&P 500 index price. If it’s rising the stock is outperforming and visa-Versa. Not the RSI. That’s a momentum indicator that is used in a different way.
  • mg
    matt g.
    7 December 2018 @ 20:34
    Hi Louis, Great presentation. I think dunks is going to be okay for awhile. But i think they are going to erode. I live in the Northeast. There are Dunkin Donuts everywhere. Literally everywhere. Adam Sandler did a skit about a guy getting directions in Boston and every turn was proceeded by "at the Dunkin Donuts." Northeast brands don't really translate well to other parts of the country or internationally, could be an impediment especially when the fees to the francishee are so high. When I've had the brand internationally, it was made more like a European coffee. Even when I have it here, it's never really consistent. They only brew one pot of coffee and then will just add flavor shots to add to your order, which can be kind of hit or miss. I would never turn it down, but to get my coffee I drive by two Dunks to go to a regional chain. Huge brand, and brand name, especially with New England sports. But i think the brand is starting to erode in its stronghold, to a regional coffee brand and the other big names. Starbucks is the brand for life-style coffee. McDonald's is low cost provider, as well as grab and go. JAB is a dark horse just gobbling up scale in breakfast. Started with Sara Lee, Peets, Green Mountain, Au Bon Pain, and one of the few New England brands that I think does translate other places further eroding them in Panera. Believe that you will be right for awhile, but I just don't see them spaced well in the competitive landscape and if their profit margins erode as they take on more franchisees, that could be a death kiss.
  • KF
    Ken F.
    7 December 2018 @ 13:43
    It better grow at 52.84X P/FCF ? https://finviz.com/quote.ashx?t=dnkn
  • JW
    Joel W.
    7 December 2018 @ 05:46
    I won't make this trade for myself, but I really appreciate the cogent and concise presentation. Thank you very much Louis.
  • LQ
    Leslie Q.
    7 December 2018 @ 05:42
    Thank you Louis, well thought out trade setup from the fundamental and technical standpoint. Will be monitoring this stock as well, cheers
  • RD
    R D.
    7 December 2018 @ 01:15
    Good mix of fundamental and technical analysis.
  • SS
    Steve S.
    6 December 2018 @ 16:17
    Is it wise to go Long restaurants when a recession is looming? Might consider shorting this.
    • LL
      Louis L. | Contributor
      6 December 2018 @ 22:02
      Up today when market down huge. Generalizing by industry is naive.
    • SS
      Steve S.
      7 December 2018 @ 16:12
      Down today though. Let's see how it plays out. Your presentation and thinking was great in this piece and I really do appreciate it. I didn't mean to generalise by industry but some particular industries are risky during a downturn and cyclical in my opinion such as restaurants, homebuilders, luxury goods etc. Best bet is to be in Utilities, Consumer Staples, Gold etc. If I had to choose a restaurant though, I would go for Mcdonald's
  • MM
    Mike M.
    6 December 2018 @ 13:03
    Added to watch list. Well thought out plan in mapping the trade.
  • CM
    Carlos M.
    6 December 2018 @ 09:27
    stop loss : below $100? stock is trading below $100 - typo on your last slide not sure about the rest of the viewers but I would rather have someone commenting on S&P and key levels to watch or shorting /buying puts on something like GM , this kind of vol might take everything out so for sure not buying anything until I see them stabilizing
    • SS
      Steve S.
      6 December 2018 @ 16:22
      Max Wolfe has already covered GM/Car stocks in prior trade ideas.
    • LL
      Louis L. | Contributor
      6 December 2018 @ 22:02
      Look again. Stop at 66
    • LL
      Louis L. | Contributor
      6 December 2018 @ 22:04
      I recorded key market levels when we recorded. Somehow it got edited out. 2755 is key resistance. No go on upside until we go above.