The restaurant chain was among the most active names on the Nasdaq Monday.

17.4

14.7

14.7

Great business success.

The unique, casual dining restaurant recently increased its stock buyback plan by $10 million. Now, the Calabasas Hills, Calf.-based company has about 17.5 million shares available for repurchase.

In order to finance the repurchase, the company said they expect to generate between $80 and $90 million in free cash flow throughout 2008. The company, who operates 139 restaurants, is also negotiating a deal with its lenders to increase its credit capacity by $50 million to $100 million to also help fund the buyback.

In other news, the company increased the size of its board from 6 members to 8 members and elected Allen Bernstein and Alexander Cappello to fill the newly created spots, beginning Feb 12.

"The extension of our repurchase authorization reflects our confidence in The Cheesecake Factory and demonstrates our ongoing commitment to increase shareholder value," said David Overton, Chairman and CEO.

On February 5th, CAKE reported full year 2007 earnings of $1.04 per share. This result was in-line with the consensus of the 20 analysts following the company and beat last year's results by 2.0%. However, fourth-quarter earnings of $15.2 million, or 22 cents a share missed analysts' estimates of 26 cents a share. Revenue for the quarter rose 13% to $406.3 million, but fell short of the $413 million forecast. The company said bad weather conditions that resulted in lower-then-expected restaurant traffic severely hurt the restaurants same-store sales.

Analyst Greg Ruedy from Stephens Investment Bankers considers The Cheesecake Factory a "best-of-breed" casual dining operator and maintains his overweight rating on the stock. Since CAKE missed fourth quarter expectations, he admits the company is not immune to the challenges in the consumer and commodity environment, but he feels their 2008 business strategy is best suited to withstand it. The company took down the number of restaurant openings in 2008 from 17 to 7-9, with the extra cash flow going towards share repurchases. "And the 2008 menu pricing plans are favorable to protect the brand and the consumer," added Ruedy.

Cheesecake Factory (CAKE) was upgraded from Underperform to Market Perform, Friedman, Billings Ramsey said. $18 price target. Stock is already discounting poor near-term results and sales could begin to improve in the second half of the year.

Last week, we had a buyback announcement from Cheesecake Factory (CAKE) that I believe makes the stock look pretty tasty.

The repurchase authorized last week was for another 5 million shares of CAKE, taking the total up to 21 million shares. Under this program, the company has already bought back about 13.5 million shares. In the current quarter, CAKE repurchased 2.2 million shares for about $49 million.

Although the casual dining chain missed Wall Street expectations in the third quarter, it's still standing tall against the headwind of slowing consumer spending. Early last month, analyst Christopher O'Cull of SunTrust Robinson Humphrey upgraded Cheesecake Factory from neutral to buy, saying that earnings could grow despite consumer spending and cost concerns. O'Cull added that the company had "clearly outperformed the casual dining segment."

This year has not been one of the best for the restaurant sector, to say the least. While the sector struggled to get past higher raw material prices and labor costs on the one hand and a surge in gasoline prices on the other, it was faced with the credit crunch. I certainly wouldn't say to ignore the possibility that there could be a continued economic slowdown. However, Cheesecake Factory is positioned in the upscale casual segment, which is less impacted by these spending pressures than its peers catering to low- and middle-income consumers.

Analyst Jeffrey Bernstein of Lehman Brothers has an overweight rating on the company and said its 2008 guidance of 22% to 24% EPS growth was a "pleasant surprise." Bernstein added that the stock represented "compelling value for long-term investors." Goldman Sachs analyst Steven Kron said in a note to investors that the company is "fundamentally better-positioned versus peers in the current environment." According to analyst Steve West of Stifel Nicholas, Cheesecake Factory's new Kitchen Management System initiative may be expected to boost operating margins in the future, enabling the company to achieve its long-term operating margin target of 12%.

Nice good. Nice ambience. Price is cheap now.

Low and has been a possible take out.

From Barron's 7-2-07:

"In retailing, most people look at the demand side. I always focus on the supply side. Look at casual-dining restaurant companies like P.F. Chang [PFCB], Cheesecake Factory [CAKE], Red Robin Gourmet [RRGB], Buffalo Wild Wings [BWLD] and California Pizza Kitchen [CPKI]. They're growing 15% to 40% per year and generally have P/E multiples of 20 to 30. By my calculation, based on the rate they are opening restaurants, Americans are going to have to eat 28 meals a week out of the house by 2011 to justify these multiples. So unless Americans are going to get very fat or very rich or their houses are going to burn down, that's unlikely to happen."

Restaurants are too risky.D

lost some money here