Cava (CAVA) Moves to Sell a Quarter, SharkNinja (SN) to Hold
A lot of consumer stocks have been selling off and our restaurant star Cava (CAVA) has gotten caught up in the mayhem this week. Granted, it’s only sold off for two days (today being #2), but looking at the group of 2024 restaurant outperformers (including SG, CMG, SHAK and EAT) today, and factoring in that CAVA still trades at a premium, it’s not hard to imagine a larger drawdown. On the other hand, the business is doing well, grabbing market share, etc. This could just be a quick dip. Let’s play both sides of the ball here by selling part of our stake for a roughly 40% gain. Given that we started with a half-sized position in April, this means selling half of what we have (i.e., a quarter-sized position), leaving us with a quarter-sized position (i.e., half of what we started with). Sell a Quarter, Hold a Quarter
In other news, shares of SharkNinja (SN) have pulled back about 10 points since mid-June, to around 71. Management sat down with analysts at Bank of America about a week and a half ago, driving the bank to increase its price target from 90 to 95. Talk of the Ninja FrostVault cooler (sold at Dicks (DKS)) and the Ninja Thirsti carbonating drink system (grocery/supermarket channel) sound like significant growth opportunities. The stock looks attractive on this consumer stock dip, so reiterating buy rating. BUY
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