Date updated:04-25-2007
We remain selective on the restaurant sector in 2007, with ongoing challenges from the current/operating environment.Rising corn and feedstock prices along with cyclical changes and food-industry capacity rationalization will likely continue to impact proteins (beef and chicken being primary restaurant inputs), as we look out toward 2008. Many restaurant companies have 2007 contracts at prices below current spot-market levels, but appear to be staring at material "reinvestment risk" as they look out to next year.We received what could be an "early shot across the bow" yesterday as Brinker International (EAT) discussed food-cost pressures in some of its contracts that expire with its coming June fiscal year end.
Given the above-mentioned food-cost pressures as well as labor-costs pressures (from state and likely federal minimum-wage increases), we remain cautious regarding the stocks, particularly casual-dining names, many of which continue to have negative same-store sales.The quick-service restaurants sector appears to be better positioned, given positive sales trends and franchise business models, which provide some degree of inflationary protection. Price increases are one way to help offset food costs, but the current casual-dining sales environment makes this lever harder to pull.
Banc of America Securities

-
EAT
Brinker Intl Inc - $16.30
- 0.00%
- $16.30
No Analysis added

-
APPB
Appb - $0.00
- N/A
- $N/A
No Analysis added

-
DRI
Darden Restaurant - $37.53
- -0.16%
- $37.66
No Analysis added

-
OSI
Osi - $0.00
- N/A
- $N/A
No Analysis added

-
CAKE
The Cheesecake Fa - $21.34
- +0.38%
- $21.30
No Analysis added

-
PNRA
Panera Bread Comp - $70.96
- +0.51%
- $N/A
No Analysis added

-
RUBO
Rubio's Restauran - $8.06
- 0.00%
- $N/A
No Analysis added

-
CHUX
O'charley's Inc. - $6.96
- 0.00%
- $N/A
No Analysis added
- Restaurant Stocks's Blog
- No Blogs Found
- Top Professional Portfolios
- 1. Fidelity Contrafund - ...
- 2. Bernard L. Madoff Inve...
- 3. Argus Management
- 4. Calamos Advisors
- 5. Charlie Munger
- show all
- Top Do-It-Yourself Portfolios
- » jgroov Portfolio 1
- » ben johnson
- » my holdings
- » SC TRADE OF THE DAY
- » kudos
- show all
- Most Viewed Portfolios
- » Warren Buffett
- » George Soros
- » T. Boone Pickens - BP Cap...
- » Carl Icahn
- » Renaissance Technologies
- show all
By Jonas Elmerraji Posted on Feb. 9, 2010 With stocks continuing to underwhelm in yesterday’s trading session, the attention is turning toward trading. After all, tec...
By Roberto Pedone Posted on Feb. 8, 2010 Good Buys For Bad Times: This Barron’s article says with the U.S. economy expected to grow by only 3% in 2010, investors shou...
Posted on Feb. 8, 2010 Finance Professor Scott Rothbort will be answering questions on Stockpickr Answers on Monday, Feb. 8. Ask away! Regardless of why a stock is in...
By Jonas Elmerraji Posted on Feb. 8, 2010 Finance Professor Scott Rothbort will be answering questions on Stockpickr Answers on Monday, Feb. 8. Ask away! Investor an...
A. we will see if any of that plays out or
is true.
A. The only one I own : SLX,
too hard pick a winner out all of them
Here are some of the biggest stocks that made the 52-week high list on Feb. 9, 2010. more
Analyst Downgrades and EPS estimate changes for Feb. 9, 2010. more
Unusually active options can often indicate that a major event in a stock is about to take place, or that unsophisticated investors (using options in lieu of leverage) are ... more













Comments not available