Written by Rebecca Lipman
McDonald's (NYSE:MCD) will begin advertising its Happy Meal's healthier menu options beginning March 7th, reports Bloomberg.
The fast-food chain has long been hurt by its junk-food image and its arguable contribution to the country's obesity rates. McDonald's is now hoping these nutrition-focused ads will draw back some of its health-conscious customers and their children.
According to Bloomberg the kids' meals commercials "will feature new characters who tout the benefits of eating Happy Meal items such as apple slices and fat free chocolate milk."
Amid rising obesity rates and targeting media, the company has slowly been adopting more health-conscious menu options that include salads and fruit cups. Last year McDonald's introduced apple slices and smaller packets of French fries in Happy Meals, reducing calories by about 20%, reports Bloomberg.
The chain has also committed to reducing sodium by 15% across the national menu by 2015. In addition, McDonald's promises to "reduce added sugars, saturated fat and calories through varied portion sizes and reformulations by 2020," reports Crain's Chicago Business.
Power to Sway
While some argue customers will not seek out fast-food chains if they intend to eat a salad, the menu options can sway a health-conscious family member or friend who might not have gone to the restaurant otherwise, or who might have persuaded a group to eat elsewhere.
With this in mind, popular food chains have felt the need to respond to healthier dietary demands. Will mounting pressure and response bring in stronger same-store sales?
Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.
Business Section: Investing Ideas
To be sure, it will be an uphill battle for many restaurants to shed their unhealthy images and appeal to masses. For ideas on which restaurant companies may not have an easy time adjusting, we took a look at institutional investing activities.
Below are eight companies that have seen net institutional selling in the current quarter. The "smart money" seems to think these companies will soon price in a loss. Do you agree? And do you think health concerns have anything to do with their pessimism?
Use this list as a starting-off point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. The Cheesecake Factory Incorporated (Nasdaq:CAKE): Operates upscale, casual, and full-service dining restaurants in the United States. Net institutional sales in the current quarter at -3.0M shares, which represents about 6.29% of the company's float of 47.71M shares
2. CEC Entertainment Inc. (NYSE:CEC): Develops, operates, and franchises family dining and entertainment centers under the name ""Chuck E. Cheese"" Net institutional sales in the current quarter at -885.5K shares, which represents about 5.35% of the company's float of 16.55M shares
3. Denny's Corporation (Nasdaq:DENN): Engages in the ownership and operation of a chain of family-style restaurants. Net institutional sales in the current quarter at -10.5M shares, which represents about 11.05% of the company's float of 95.00M shares
4. DineEquity, Inc. (NYSE:DIN): Develops, franchises, and operates full-service restaurant chains in the United States and internationally. Net institutional sales in the current quarter at -1.4M shares, which represents about 9.34% of the company's float of 14.99M shares
5. Brinker International Inc. (NYSE:EAT): Develops, operates, and franchises various restaurant brands primarily in the United States. Net institutional sales in the current quarter at -3.4M shares, which represents about 4.38% of the company's float of 77.62M shares
6. Jack in the Box Inc. (Nasdaq:JACK): Operates as a restaurant company that operates and franchises Jack in the Box restaurants. Net institutional sales in the current quarter at -1.8M shares, which represents about 4.45% of the company's float of 40.46M shares
7. Papa John's International Inc. (Nasdaq:PZZA): Operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States. Net institutional sales in the current quarter at -624.0K shares, which represents about 3.43% of the company's float of 18.21M shares
8. Texas Roadhouse Inc. (Nasdaq:TXRH): Operates a full-service, casual dining restaurant chain in the United States. Net institutional sales in the current quarter at -4.2M shares, which represents about 7.03% of the company's float of 59.72M shares.
Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Institutional data sourced from Fidelity.