Cracker Barrel Old Country Store
One earnings short-squeeze play in restaurants complex is casual dining player Cracker Barrel Old Country Stores (CBRL - Get Report), which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect Cracker Barrel Old Country Store to report revenue of $602.20 million on earnings of $1.05 per share.
This company crushed Wall Street estimates last quarter after they beat by 9 cents per share. Market players will be looking for another sizeable beat this quarter that could lead to big spike higher in the stock. Cracker Barrel's profits have jumped year-over-year by an average of 3.5% over the past five quarters. Revenue has also trended up for three consecutive quarters.>>7 Smaller Stocks Beating the Big Guys The current short interest as a percentage of the float for Cracker Barrel, one of the highest-yielding leisure stocks, is 7.2%. That means that out of the 19.38 million shares in the tradable float, 1.61 million are sold short by the bears. This is a pretty decent short interest on a stock with a very low float. Any bullish earnings news and guidance could easily spark a solid short-squeeze. From a technical standpoint, this stock is currently trading above its 50-day and 200-day moving averages, which is bullish. On Monday, while the market sold off hard, shares of CBRL jumped 1% as the stock moved back above its 200-day moving average of $45.66 on heavy volume. If you're bullish on Cracker Barrel, wait until after its report and buy the stock if it breaks out above some past overhead resistance at $46.66 on high-volume. Look for volume that's tracking in close to or above its three-month average action of 369,030 shares. If we see that high-volume breakout post-earnings, then I expect this stock to re-test its July high near $49.60 a share, or possibly go much higher. I would look to short this stock after earnings only if it fails to breakout and falls back below its 200-day at $45.66 on heavy volume. I would add to any short positions if the stock then moves back below its 50-day at $42 on strong volume. Target a fall back towards $41 to $39, or possibly even lower if market players are dumping this stock post-earnings.