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 31, 2001

APPB - Applebee's $439.78 -3.32 (-3.94)

APPB was indirectly hit by the announcement out of CEC Entertainment (NYSE:CEC) Wednesday night that they would not meet their earnings target for the year. As a result of CEC's (Chuck E. Cheese) woes, restaurant and soft drink stocks traded much lower on the day. Our stop at $40.50 was triggered in the downdraft, so we exit APPB with a loss today.

Picked on May 16th @ $62.00
Profit/Loss -3.42 (-8%) (Stopped Thursday @ $40.50)
Best Profit +2.24 (5%)

May 29, 2001

APPB lost ground on Tuesday, but found support at the bottom of its current base near $42.40. The good news was that the volume on the sell off was even lighter than Friday's light volume of 325,000 shares. Today's volume came in at only 230,000 shares, which tells us that APPB may be content to trade around $44 for a while before picking up steam. Looking at the chart, resistance has come in around $44.70 and then higher at $45. APPB's MACD still is decidedly negative so traders should wait until APPB confirms its strength before initiating new positions. That being said, traders should wait until APPB takes out its old high of $45.44 on volume of at least 500,000 shares before taking the plunge into the "neighborhood restaurant."

Picked on May 15th @ $43.20
Change since picked +0.06
Stop Loss @ $40.50

May 27, 2001

Investors continue to snack on the restaurant stocks even as the NASDAQ and S&P 500 move lower. On Friday, shares of APPB gapped higher at the open and moved north for most of the session. It wasn't until the last five minutes of trading that we saw any real selling pressure come in, and this was probably just a result of the day traders going flat for the long weekend. Looking at the bigger picture, APPB has become a little extended, and may churn around the $44 level next week. We will make sure that the 20-dma at $43.30 continues offering support and that the MACD does not continue to roll negative. In addition, any new positions should not be considered unless APPB can close above $45 on volume of at least 450,000 shares to ensure that buyers are still supporting the stock.

Picked on May 15th @ $43.20
Change since picked +0.52
Stop Loss @ $40.50