Seeking Alpha

Analysis: Starboard involvement sets up Darden Restaurants for gains

  • Hedgeye's Howard Penney thinks Darden Restaurants (DRI) can be a long-term turnaround story if Starboard is successful in landing board seats.
  • He writes that Starboard isn't the stereotypical activist investor out looking to make a quick buck.
  • The upside is so high with Darden it gives investors a "generational opportunity," according to Penney.
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Comments (5)
  • CMPMD
    , contributor
    Comments (141) | Send Message
     
    Suddenly, I get the feeling I should sell all my Darden stock...
    30 May 2014, 10:24 AM Reply Like
  • ARG1
    , contributor
    Comments (1173) | Send Message
     
    Go sell it! I am a buyer here.
    30 May 2014, 12:05 PM Reply Like
  • CMPMD
    , contributor
    Comments (141) | Send Message
     
    Nah, I don't really want to sell my Darden stock. The dividend is too good and my cost basis is so low that it's worth it to me to hold on and see how all this drama plays out. I was being sarcastic because of the opinion of Hegdeye's Howard Penney. In fact, imo, at least in the short term, their dividend is more secure now than it was a few weeks ago with the share buy back and debt retirement they have planned with the proceeds from the Red Lobster sale.

     

    I wonder by what logic Darden decided to write their bylaws so that they reelect all of their board of directors at once? Unless I'm missing something, it sure doesn't appear to be a very prudent move in light of the activist investor attention they're getting.
    1 Jun 2014, 08:51 AM Reply Like
  • ARG1
    , contributor
    Comments (1173) | Send Message
     
    Good thing you didn't sell:
    Restaurant industry metrics show improvement in April
    Jun 2 2014, 11:34 ET
    Improved traffic at restaurants chains in April helped boost the Restaurant Performance Index monitored by the National Restaurant Association by 0.3% to 101.7.The Expectations Index, which measures the six-month outlook for operators, improved 0.2% to 102.2 to mark the highest level for the index in two years.
    Further, Starboard and Barrington activists are breathing down the neck of DRI management. At some point Clarence Otis will have to strike a new tone with them and that will be good gor DRI shareholders.
    2 Jun 2014, 12:36 PM Reply Like
  • Just an Ironworker
    , contributor
    Comments (13) | Send Message
     
    I was also doing a flip flop on DRI but have decided to hold on and see what Starboard brings to the table.
    1 Jun 2014, 07:17 AM Reply Like
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