Short seller Jim Chanos announced on CNBC Thursday that he is betting on two fast food stocks.
The shares of Restaurant Brands ̵
In Making In his case, Chanos said the price-earnings ratios for restaurant stocks are "higher, higher, and higher than the restaurants themselves struggled."
"It has to end sometime," he said.
"This is part of a broader theme … the franchisee versus the franchisees," said Chanos. He said he does not like what he calls this "asset-light idea" of these companies who do not own their restaurants, while "the coupons fundamentally caps the royalties" of the franchises.
"We are also short a number of these asset-light models," he said, but he gave no names except Restaurant Brands and Dunkin.
Dunkin & # 39; s Brands reported quarterly adjusted earnings per share of 62 cents per share – 9 cents better than expected. The revenue of $ 301.3 million, however, fell short of the estimates.
The proportions of Dunkin & # 39; – proprietor of Dunkin & # 39; Donuts and Baskin-Robbins – were 3.5 percent lower in 2018, but were 13.3 percent higher in the past 12 months than on Wednesday
Brands restaurant said Tuesday Adjusted quarterly earnings were 66 cents a share – 10 cents higher than estimates. Sales of $ 1.25 billion also exceeded expectations.
The shares of Restaurant Brands were 10.7 percent lower in 2018 and declined by about 6 percent in the last 12 months to Wednesday's end.
Neither Restaurant Brands and Dunkin's Brands were immediately available to respond to CNBC's requests for comment from Chanos & # 39; s. To respond to an interview.
Kynikos Associates, with over $ 2 billion in assets under management, saw a short-only fund of 12 percent of sources familiar with the issue last year. The hedge fund of Kynikos rose last year by 22 percent, it said. Both funds are expected to be flat in 2018.