Filed under: Major movement, Earnings reports, Bad news, Industry, Options, Technical Analysis

Texas Roadhouse (NASDAQ: TXRH - option chain) shares are dropping today after the company reported a third-quarter profit of $8.6 million, or 12 cents per share, missing analysts’ estimates of 13 cents per share. TXRH also warned that earnings for 2008 will be flat with last year’s numbers.

It has been common wisdom that worried consumers won’t be spending their cash on casual dining until they feel more confident about the economy, and the flat full-year forecast from TXRH seems to add weight to that thesis. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TXRH.

This morning, TXRH opened at $6.91. So far today the stock has hit a low of $6.23 and a high of $6.96. As of 12:20, TXRH is trading at $6.21, down $0.93 (-13.0%). The chart for TXRH looks bearish and S&P gives TXRH its lowest 1 STARS (out of 5) strong sell ranking.

For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $7.50 range.

Continue reading Texas Roadhouse (TXRH) Q3 earnings show consumers staying away

Texas Roadhouse (TXRH) Q3 earnings show consumers staying away originally appeared on BloggingStocks on Tue, 28 Oct 2008 12:52:00 EST. Please see our terms for use of feeds.

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This entry was posted on Sunday, November 9th, 2008 at 11:00 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.