Applebee%s International develops, franchises and operates casual dining restaurants in 49 states and eight international countries under the Applebee%s Neighborhood Grill and Bar brand. For the FY ended 12/00, (53 weeks vs. 52 weeks), revenues rose 3% to $690.2M. Net income rose 17%to $63.2M. Revenues reflect increased same stores sales anda new advertising campaign. Earnings reflect lower losses on the disposition of restaurants.

May 15, 2001

Last week, Applebee’s declared a 3-for-2 stock split. This week, we are adding Applebee’s to our Current Play list, and with good reason. APPB has been in a strong up trend since March 1st, advancing from a low of $30.50 to today’s close of $43.20, a 43 percent gain. Moreover, we think APPB could continue advancing into its split payable scheduled for June 12th. To that end, ABBP posted a new all-time high today of $44.01, eclipsing resistance at $42.50 in the process. At this point, APPB has no immediate overhead resistance (though the psychologically-significant $45.00 level could present a minor obstacle). As for support, APPB has the 10-dma at $42.94 followed by the 20-dma at $42.12. Traders considering a position in APPB should look for a move through Tuesday’s intra-day high of $44.01 or a bounce off the 10-dma on volume of 150,000 shares traded by mid-day. One caveat for conservative traders, though, APPB’s stochastic is showing it to be overbought, so this trade could be a little more risky than usual.

Picked on May 15th @ $43.20
Change since picked 0.00
Stop Loss @ $40.50

May 17, 2001

Applebee’s continues to hug its 10-dma. Better yet, it’s starting to advance off it. After moving in tandem with its 10-dma over the past two weeks, APPB broke out yesterday to put some distance between itself and this important level of support. In fact, with today’s close, APPB has put $0.82 worth of space between it and its 10-dma at $43.22. APPB has been in a strong up trend since March 1st. Moreover, we think APPB could build on this trend into its split payable scheduled for June 12th. To that end, ABBP posted a new all-time closing high today of $44.05. At this point, APPB has no immediate overhead resistance (though the psychologically-significant $45.00 level could present a minor obstacle). As for support, APPB has the aforementioned 10-dma followed by the 20-dma at $42.46. Traders considering a position in APPB should look for a move through today’s intra-day high of $44.35 or a bounce off the 10-dma on volume of 150,000 shares traded by mid-day. One caveat for conservative traders, though, APPB’s stochastic is showing it to be overbought, so this trade could carry a little more risk than usual.

Picked on May 15th @ $43.20
Change since picked +0.85
Stop Loss @ $40.50