A Made For Hollywood Story, Real World Pattern

Written by GSCR Staff   
Tuesday, 03 February 2015 08:00

The Super Bowl has come and gone and we got another great game.

A big part of the Super Bowl is always the commercials, which we thought were somewhat disappointing. These advertisers seem to have lost their inner Don Draper and forgot they were supposed to sell us their products with a made for Hollywood Americana story in 30 seconds, not send a message.

 

What was the deal with the Nationwide Insurance commercial about child accidents and deaths? If their mission was to accomplish a morbid, tragic mood on what is supposed to be a fun day, then mission accomplished. Perhaps the fact that so many people are talking about it makes the spot worth the money. Nevertheless, this was inappropriate in our minds.

 

Speaking of Americana, McDonalds (NYSE – MCD - $92.51) seems to be reaching for anything to turn things around with their “Pay with Love” promotion advertised Sunday. The Company missed on earnings recently and the stock is down nearly 10% over the last 9 months. Cheap oil and gas may actually hurt MCD as consumers look to go more upscale with the extra money in their pockets.

 

Finally, burgers and fries were all the rage last week. The Shake Shack, Inc. (NYSE – SHAK - $43.99) IPO was launched on Friday at $47, and shot up as high as $49.77 during the day. Right on queue yesterday however, SHAK dropped a whopping 4.2% on an up day in the market. The story here is truly a remarkable made for Hollywood script as the Company literally started as a NYC food stand. However, the familiar pattern will probably repeat itself very similar to other over hyped IPO’s like Facebook, Inc. (NASDAQ – FB). A hot start, a plummet, followed by the gradual climb back to gains is probably in the cards here. Our advice is to wait for things to shake out with SHAK. OK, that was too easy…

 

Have a great day!

 

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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