As I proposed in the Monday-Tuesday Earnings Preview

Buffalo Wild Wings (BWLD) - their results last quarter set off 90 days of victory; frankly at this point the casual dining group is so overheated we should start seeing "sell the news reactions" - imperative word being "should".

And in yesterday's update (Bookkeeping: Some Selective Purchases)

Traders continue to pile into restaurants as if they are internet stocks circa 99... Buffalo Wild Wings (BWLD) surging ahead of earnings tonight. Again, we are almost at the point where we will soon see "sell the news" reaction as expectations are beginning to get out of hand in casual dining - not sure how many times the same old stocks can rally on the same "surprise". (Apr 23: America's Hottest Sector - Casual Dining)

We are indeed getting "sell the news" reactions in a sector traders have run up relentlessly. As always Wall Street is a game of expectations - we are seeing many "beats" across the universe as the bar was set extremely low; so pundits in TV land are cheering horrific year over year results that are "beating" analysts. But as a flurry of reports "beat", expectations ratchet up... and by the time you get later into this earnings season the bar is not quite so low... hence my reasoning "sell the news" is going to be an appropriate reaction. Even on a strong day for the market... remember -6.1% GDP is a good thing; green shoots throughout.

Last night both Buffalo Wild Wings (BWLD) and Panera Bread (PNRA) reported; even the former with an excellent result was down 10% after hours as "momo" traders piled in; but this morning is only down 6%... Panera likewise is down 7%. My concern with these guys, is as with many stocks in the market after this big run - valuation. I appear to be the only one as people continue to pile into stocks no matter the price. Buffalo Wild Wings at 26x FORWARD estimates and Panera Bread at 24x FORWARD estimates - thats not out one quarter, but out 3 full quarters on year end 2009. I just can't dig that as much - even with companies executing. The only case for bulls at this point is a massive consumer rebound in Q3, Q4 this year which causes earnings estimates to jump 10-30%... I can't get behind that thought process with unemployment ramping; no matter how cheap Uncle Ben makes money.

But let's take a gander at results from each - again BWLD being the favored son in my eyes (and former fund holding) - I much prefer the younger, high growth story (Feb 23, 2009: Buffalo Wild Wings with Saucy Report) (Aug 11, 2008: Starting Buffalo Wild Wings Position)

BWLD results via AP here and here

• Bar and chicken wing chain Buffalo Wild Wings Inc. said Wednesday its first-quarter profit jumped 30 percent on strong sales at established locations to top Wall Street expectations. For the quarter ended March 29, net income climbed to $8.5 million, or 47 cents per share, from $6.5 million, or 36 cents per share, a year ago.