POLLO LOCO – NOT EURO-LOCO
El Pollo Loco Holdings, Inc. (NASDAQ: LOCO) has roughly 430 stores in the United States and it has not even come close to finishing a U.S. buildout. This stock may be weak, but it’s hard to pin any of that weakness on Europe or Britain as its stores are all in the United States. Its annual report hardly even has the word international in it at all.
Shares of El Pollo Loco were recently trading down 3.8% at $12.09, with a 52-week trading range of $9.58 to $21.04.
FIVE BELOW – THE OTHER DOLLAR STORE
Five Below, Inc. (NASDAQ: FIVE) may be relatively new and in many ways it competes for the dollar store theme. As of June 20, 2016, it operated approximately 450 stores in 30 states. Its stock was down over 1% with the broader market after the Brexit news, but the reality is that its shares are still challenging 52-week highs. Just like Dollar General, cheaper overseas merchandise is a win for it to buy and sell in the U.S.
Five Below shares were last trading down 1% at $45.85. The stock has a 52-week trading range of $26.95 to $46.50.
PNM RESOURCES – NM/TX ELECTRICITY
PNM Resources, Inc. (NYSE: PNM) is an electric utility with customers only in New Mexico and in Texas. There are of course other utilities that have no exposure, but many people in its markets could financially care less about what is happening with Britain and Europe.
Shares of PNM were recently trading up 0.3% at $33.73, with a 52-week trading range of $24.42 to $34.84.
24/7 Wall St. has tracked several of the knee-jerk reactions from some top brokerage firms and top independent sources with direct quotes. Here are some of the basic Brexit statements made by analysts and economists.
Greg McBride, Bankrate.com’s chief financial analyst: “We had a big relief rally in expectation of a ‘stay’ vote, so hold on to your hats because markets now have to reprice for the outcome. Today will be an ugly day in global financial markets. But since nothing will change right away, a market overreaction presents an attractive buying opportunity.”
BofA Merrill Lynch’s Europe Economic Weekly called it uncharted waters: “Despite indications from opinion polls, the UK has decided to leave the EU. We think that the UK economy will be the main victim, but the shock for the Euro area and global economy will be significant. UK: We expect the economy to quickly enter recession, the BoE to cut rates 50 basis points in July and restart QE potentially in August.”
Dan Kemp of Morningstar Investment Management: “Investors need to keep cool calm heads amid political and financial uncertainty following the Brexit vote.”
World Gold Council: “With Britain voting to exit the European Union, we expect to see strong and sustained inflows into the gold market driven by the staggering level of protracted uncertainty that investors now face… The Bank of England has said that it stands ready to take whatever action is necessary, a mantra that is likely to be repeated by other central banks. In practice, this could mean interest rates move further into negative territory in parts of the world, another positive for gold. Central bank action has already capped the gain in other safe haven assets, with the Swiss National Bank intervening early this morning.”