Bloomin’ Brands Inc (NASDAQ:BLMN) is a conglomerate restaurant company operating a number of chain restaurants. The company’s brands include Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse and Roy’s. Bloomin’ IPO’d in August of 2012 with an initial price of $11 per share. The company initially offered 16 million shares, with 119 million shares total outstanding. Bloomin’ announced a secondary stock offering of 19 million shares at the end of May, with another 2.85 million available for sale by insiders. Bloomin’ Brands Inc (NASDAQ:BLMN)’ insiders have recently been selling large amounts of the stock. This increased liquidity, combined with the heavy insider selling, could make Bloomin’ a potential short candidate.
Bloomin’ Brands Inc (NASDAQ:BLMN)’ is still growing its business. The company announced that total revenue for the first quarter of 2013 rose by 3.5% to $1.1 billion, with the revenue increase due primarily to the opening of 44 new restaurants. Adjusted net income increased to $63.2 million, versus $59.6 million for the same quarter last year. The company now has a market cap of $2.84 billion.
Insiders have been dumping their stock on the market. Over the past three months, there have been 14 insider sales with a net 70.52 million shares sold, out of a total float of 108 million shares. The IPO lockup period ended in February, and so some insider selling is to be expected. However, the massive amount of shares being sold should give investors pause to consider how additional liquidity in the market might impact Bloomin’ Brands Inc (NASDAQ:BLMN)’s stock price. As of May 31, there was a short interest of 2.7 million shares, representing a short float of 2.89% and a short ratio of 4.23. The stock has an average daily volume of 741,000.
Technically, Bloomin’ is trading in an upward channel since November 2012, and is currently priced above its 50-day SMA around $23.50. The stock is up a spectacular 49% year to date. Since the beginning of June, the price action has flattened out on declining volume. Still, there has been no clear break out of the upward channel yet.
What Are Others Doing?
Investors should also examine some of Bloomin’ Brands Inc (NASDAQ:BLMN)’s competitors to get a better grasp on the sector as a whole. Darden Restaurants, Inc. (NYSE:DRI) is a large restaurant company with a market cap of over $7 billion, a current P/E ratio of 15.74, and a dividend yield of 3.83%. Darden operates the well-known chains Olive Garden, Red Lobster and Longhorn Steakhouse, as well as other brands. At the end of March, Darden reported 3rd quarter sales of $2.26 billion, an increase of 4.6% from the same quarter last year. Darden’s share price is up 22.86% year to date, but may be facing resistance around $54.00 and is trading about 12% below its 52 week high.