Cracker Barrel (CBRL) was down as a lot as 14% just lately. It wasn’t earnings, or identical retailer gross sales. It was one other “millenial kitsch” rebrand.
I’ve been a “fan” of CBRL previously. It had some unbelievable runs within the early 2010s, so the ticker has at all times caught in my thoughts.
However… we’re a Waffle Home household. I didn’t eat at a Cracker Barrel as an grownup till only a few years in the past, and I used to be impressed. Good meals at affordable costs, and a vibe that appeared ironic pre-2020 however now has a sincerity about it.
They usually killed it. No, they actually killed the model.
It went from “messy fish camp” to “sterile millenial gray.” This isn’t going to work.
HOWEVER – this type of story pulls a ton of volatility into the inventory, and that may get some strong setups.
The inventory has been useless cash for years. Meals inflation was a significant explanation for the final push down, and it did technically have a double backside.
Possibly this dangerous information is what it wants. The corporate introduced final yr that their rebranding initiative was going to run $700 million. In the event that they see the sentiment (and the inventory’s response) then they will reallocate that capital again to one thing extra helpful to shareholders.
Like a inventory buyback.
Informal eating may make a flip quickly if meals deflation reveals up. Eggs are (sorta) low cost once more, and whereas beef goes parabolic, the softs have reset.
I truly assume Denny’s (DENN) of all shares could possibly be a great bottom-fishing commerce:
So don’t sleep on Cracker Barrel. Or Disney. Or Victoria’s Secret. You’d be shocked at how nicely these “murdered manufacturers” commerce.
The New AI Layer
Earlier this month, OpenAI introduced GPT 5. It’s setting new benchmarks, exhibiting improved reasoning, and may specialize significantly better than its prior variations.
The issue? Except you’re an influence person, until you’re somebody who has been working with the tech for years…
You don’t care.
People are horrible at working in an exponential atmosphere. Our dopamine will get fried. Yeah, it was cool that we will generate photos from a immediate, however individuals don’t know the incremental distinction anymore.
I’m sorry to say that traders are individuals too.
If they begin having a hangover from the entire AI breakthroughs, it’s going to be mirrored in value motion.
The Mag7 are all tech momentum shares. I don’t care that they’re buying and selling at a $4.5T valuation, the homeowners of those names are a bunch of panicky sheep. They’re not “investing” for the dividend yield or as a result of it’s buying and selling at truthful worth.
And if there have been a statistically regular pullback in these names, then these traders would begin trying to find a story. All it might take is a small whiff of bearish headline they usually’ll glom onto it like a bunch of panicky idiots.
What sort of headline would it not take? I don’t know, perhaps one thing like Meta pausing AI hiring:
That is the largest threat the market faces. It’s not the Fed, it’s not company earnings, it’s positioning and the psychology of these traders. That’s what has me spooked.
There are going to be different AI performs. I’ve talked about photo voltaic and the ability calls for, that are beginning to present up in utilities. There’s additionally the agentic MPC play, which I’ll want to put in writing a deep dive on because it’s received monster upside.
There’s a Higher Edge In These Names
However you even have utilized AI. Corporations which have added a layer onto present software program to extend the worth of their choices.
Roblox (RBLX) is a superb instance of a run. Its gaming engine is simple pickings for AI instruments and it was accretive to their ecosystem.
I did get bearish on this inventory, suggesting the Oct $110 places at 2.90, that are at the moment buying and selling for $6.70 and I believe it may roll extra.
But there’s names that haven’t seen the capital rotation for the utilized AI commerce.
Tempus (TEM) is one which has been caught sub $75 since its IPO and could possibly be able to go:
There’s yet another that hasn’t had its second but, however it’s establishing.
Unity (U):
Multi yr base, the corporate had large points in 2022 with pricing issues and the same old tech wreck dangers. They just lately launched UnityAI in beta, which is a gaming improvement engine.
This could possibly be a Roblox-like setup, the place the accretive worth add onto their present sport improvement layer unlocks a ton of worth within the inventory.
I’ll even be on the lookout for my early warning sign on these shares – the one which’s helped us spot good points of 115% in 60 days, 90% in 24 days, and 88% in seven days…
Click on right here and I’ll break all of it down in a dwell coaching replay.
