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Why Jim Chanos Is Shorting Dunkin’ Brands Group

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Jim Chanos on Dunkin’ Brands

Jim Chanos, the well-known short seller and the founder of Kynikos Associates, said in a recent interview that he has a short position in Dunkin’ Brands Group (DNKN).

Jim Chanos said in the interview that he has a bearish view on this stock because of its asset-light model, which mainly depends on collecting royalty fees from franchises. Chanos also said that the overall restaurant industry’s sales have been falling. Some restaurant companies’ sales are flat, while some companies’ sales have been falling gradually. He also believes that restaurant stock multiples are going higher. All these factors are motivating him to maintain his short position in Dunkin’ Brands Group (DNKN) and Restaurant Brands International (QSR).

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Dunkin’ Brands’ performance

On April 30, 2018, Dunkin’ Brands Group was trading at $60.96. Its 52-week high is $68.45, and its 52-week low is $50.89. On a year-to-date basis, the stock fell 7% as of April 30, 2018. The broader market S&P 500 Index (SPY) fell 1.7% during the same period. The S&P 500 Index rose 10.3% in the last one year. Dunkin’ Brands Group rose 8.7% in the last one year. However, Restaurant Brands International (QSR) fell 7.5% in the last one year.

In the next part of this series, we’ll analyze Jim Chanos’s view on the US healthcare sector.

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