{"id":102180,"date":"2017-02-15T12:34:19","date_gmt":"2017-02-15T17:34:19","guid":{"rendered":"http:\/\/countingpips.com\/?p=102180"},"modified":"2017-02-15T06:35:27","modified_gmt":"2017-02-15T11:35:27","slug":"how-to-play-trumps-tax-policy-in-one-move","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/02\/how-to-play-trumps-tax-policy-in-one-move\/","title":{"rendered":"How to Play Trump\u2019s Tax Policy in One Move"},"content":{"rendered":"
February 15, 2017<\/div>
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By WallStreetDaily.com<\/u><\/a> \"How<\/p>\n

\"LouisInvestors in the restaurant industry are on edge following a mixed earnings report from burrito superstar Chipotle Mexican Grill Inc.<\/p>\n

Last week, Barron\u2019s<\/i> ran a compelling bear piece on Chipotle \u2014 forecasting a 35% fall in shares from current levels.<\/p>\n

Not a bad call. But senior analyst Jonathan Rodriguez tipped Wall Street Daily <\/i>readers off to the burrito factory\u2019s inevitable decline nearly a year ago<\/strong><\/a>.<\/p>\n

In fact, readers who shorted shares at the time had the opportunity to snag a gain of more than 20% in just a few months.<\/p>\n

Don\u2019t worry if you missed out, though. As Jonathan points out in his article below, there are still plenty of gains to be harvested from restaurant stocks.<\/p>

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Especially now that the industry\u2019s trajectory is about to take make an abrupt reversal\u2026<\/p>\n

Forget Chipotle\u2026 Feast on This Small-Cap Dining Play Instead<\/h3>\n

\"JonathanChipotle isn\u2019t the only restaurant company to hit a rough patch recently.<\/p>\n

The industry had enjoyed several years of solid same-store comps driven by low interest rates and low fuel costs. Consumers who spent less at the pump could spend more on dining out.<\/p>\n

But growth has hit a speed bump.<\/p>\n

As the margin between the cost of dining out and staying home has fallen, more Americans are eating at home.<\/p>\n

However, President Trump\u2019s nationalist policy proposals are setting the stage for what could be an epic turnaround for restaurants.<\/p>\n

You see, bars and restaurants pay some of the highest taxes in the United States.<\/p>\n

Jeremy Bowman of The Motley Fool reports that restaurants shell out as much as 40% in taxes to Uncle Sam.<\/p>\n

But if the president is successful in reducing the corporate tax rate to 15% or 20%, hundreds of millions of dollars will be added to bottom lines across the industry.<\/p>\n

In other words, it\u2019s time to buy the dip in dining.<\/p>\n

Here\u2019s a company that\u2019s well positioned to capture the windfall\u2026<\/p>\n

Dine out and Watch the Profits Roll In<\/h3>\n

DineEquity Inc. (DIN) <\/b>is the parent company of the iconic Applebee\u2019s and International House of Pancakes restaurants.<\/p>\n

The company boasts nearly 60 years of experience in the family dining industry \u2014 with nearly 3,800 restaurants in operation around the country.<\/p>\n

DineEquity sports a market cap of just $1.2 billion.<\/p>\n

Revenue has dipped slightly over the last five years along with the company\u2019s peers.<\/p>\n

But thanks to cost-cutting and strategic share buybacks, DineEquity has posted earnings growth of 9% over the last five years, slightly outperforming the industry.<\/p>\n

Shares trade at just 12 times earnings \u2014 a 51% discount to the industry and 40% below the S&P 500.<\/p>\n

The stock also trades at 4.8 times book value \u2014 63% below the industry.<\/p>\n

And the company\u2019s operating margin is double the size of the peer average.<\/p>\n

To top it off, DineEquity also offers a 6% yield \u2014 more than twice the yield on the S&P.<\/p>\n

Now, what would a tax cut do for the company?<\/p>\n

In 2015, DineEquity paid an effective tax rate of 37.7%.<\/p>\n

All things being equal, a 20% reduction in its taxes could add $32 million to net income \u2014 potentially boosting annual earnings by a whopping 33%.<\/p>\n

That\u2019s nothing to scoff at!<\/p>\n

Since shares have struggled along with broader consumer discretionary stocks, DineEquity is now priced at an incredible discount to the market.<\/p>\n

So it stands to get a yuge<\/i> benefit from a tax cut and domestically focused economic policy.<\/p>\n

Now\u2019s the time to load your plate up with these sizzling shares.<\/p>\n

On the hunt,<\/p>\n

Jonathan Rodriguez
\nSenior Analyst, Wall Street Daily\u00a0<\/i><\/p>\n

The post How to Play Trump\u2019s Tax Policy in One Move<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com Investors in the restaurant industry are on edge following a mixed earnings report from burrito superstar Chipotle Mexican Grill Inc. Last week, Barron\u2019s ran a compelling bear piece on Chipotle \u2014 forecasting a 35% fall in shares from current levels. Not a bad call. But senior analyst Jonathan Rodriguez tipped Wall Street Daily […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-102180","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/102180","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=102180"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/102180\/revisions"}],"predecessor-version":[{"id":102185,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/102180\/revisions\/102185"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=102180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=102180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=102180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}