Within the market, we are witnessing an increase in the dispersion of returns produced by individual securities - something which poses opportunities as well as threats for investors.
Stock level dispersion can be monetised on both the upside (through long positions) and downside (through short sales). With regard to the latter, the 'casual dining' space is looking unappealing. Problems here have been well documented: excess capacity, rising labour and input costs, and a struggling consumer as wages have not kept pace with inflation. While restaurants are feeling the heat, large integrated pub & brewing groups, especially those with unwieldy estates, could also struggle: balance sheets are stretched and their food offering is often undifferentiated. EdenTree's ...
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