Stockchase Opinions

David Driscoll Cheesecake Factory Inc (The) CAKE-Q SELL Dec 05, 2006

Revenue growth has begun to slow and instead of trading at 25 X earnings, it is only growing at 10%-15%. Expect a drop to about $15.
$26.600

Stock price when the opinion was issued

food services
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TOP PICK
Top Short Expects to see a lowered guidance from same sales stores going forward. Extremely highly priced at 32 X earnings.
DON'T BUY
Has done very well. The fundamentals are very soft in the casual dining sector. It has got to a point where traffic is no longer increasing.
TOP PICK

*Short* This has been a great performing stock. It is at a 52-week high today, but thinks it has peaked out, both on the margins and the dairy portion. It has been one of the few restaurant chains that has been able to raise prices, but that is pretty much tapped out. Also, they are 90% impacted with the whole mall experience in a secular decline. He is not looking for a big hit on this, but something back into the $50s or high $40 level. Yield of 1.57%. (Analysts’ price target is $58.40.)

DON'T BUY
Poor price momentum, though valuation is decent.
BUY

It was trading at $49 when a large order occurred; he started started buying $55 October calls. Today, it's making a nice 3-4% move. It's more than tripled since the Covid bottom. He will hold them for two months.

BUY

Sells at 11x PE, pays a great yield and shares are up 6% in the last month