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Food For Thought: Some Profitable Food Stocks New Yorkers Love

|Includes: The Cheesecake Factory Incorporated (CAKE), CMG, DFRG, SBUX


Small cap restaurant stocks in New York compete with big caps in terms of following and value.

Chipotle Mexican Grill and Del Frisco's outperform fiscal revenues in 2013.

The Cheesecake Factory posts modest increase in earnings for 2013; Starbucks captures young market in New York.

Choosing a food joint to dine in or where to place your portfolio, is a bit of a challenge in New York City. The Big Apple is in itself a culinary capital, with limitless options to choose from for foodies and investors. Found below are our NYC food stock picks, whether you're looking for a place to fill up your tank, or a profitable long-term investment to add to your portfolio.


Kickstart lunch or dinner at Bryant Park Grill or Clyde Frazier's Wine and Dine for a true NYC gastronomic experience. Both restaurants offer an impressive selection of organic salads, hearty soups and finger foods. It's up to guests if they want to stay for the entire course, which both restaurants cater exceptionally as well. For us, however, the stars of these two restaurants' menu are the starters.

ARK Restaurants Corp. (NASDAQ: ARKR) owns and operates Bryant Park Grill and Clyde Frazier's Wine and Dine. ARK Restaurants runs 21 restaurant models, 22 fast food concepts and catering operations in New York, Washington, and Las Vegas. The company made headlines recently when it declined a takeover bid from Landry's, a bigger restaurant stock which owns Bubba Gump Shrimp Co. and McCormick & Schmick's.

Shares of the company traded at $21.81 on Thursday, based on Yahoo Finance market data. The company has a small market cap of $71.04 million.

When in New York, you should not miss trying a hot bowl of soup from The Original Soupman, a soup franchise with over eight locations in the city. Its yummy Lobster Bisque soups and Jambalaya are a huge favorite among local customers, while its Skinny Soup variants are beloved by consumers looking for healthier alternatives.

Soupman, Inc. (OTCQX: SOUP) is the parent company of The Original Soupman brand and is responsible for manufacturing and distributing premium soups in the United States. It has partnered recently with Tetra Pak to package its soup varieties which helped placed the soup brand on supermarket aisles, where big players Campbell's and Progresso are displayed. This has allowed the company to grow its customer base, leading to more shelf-spaces in over 3,000 supermarkets and grocery stores such as Food Emporium, Walmart, Meijer, Safeway and Super Fresh in the U.S.

Like ARKR, Soupman is on the opposite end of the spectrum of the other food stocks we will discuss in this article, with a small market capitalization $14.4 million, according to Yahoo Finance data. Despite being a micro-cap, however, SOUP has drawn an impressive roster of investors including Seinfeld star Jason Alexander, and athletes Reggie Jackson and Shaquille O'Neal. The company's pricing is also on an upswing, trading at 0.44 a share, a 0.99 percent increase from results of the previous trading day. On Monday, SOUP closed at .38. It also traded at 0.30 to 0.76 over the last 52 weeks.s


Craving comfort Mexican food (or a big-cap stock)? Chipotle Mexican Grill (NYSE: CMG) allows diners to feast on your favorite Mexican food minus the guilt, as it uses only 100 percent organic, trans fat-free and free-range ingredients. Although hailing from the Midwest, the 20-year-old, fast casual dining company appeals to the younger and health-conscious New York market segment for its customized and healthy menu choices.

The growth potential of Chipotle is notable, according to an IAEResearch's report on Seeking Alpha. In 2013, Chipotle opened 185 new locations which helped generate $3.21 billion in revenue for the company. The revenue reflected a 17.7 percent increase for the said year, allowing investors to earn $10.47 per share.

The company went public in 2006. Shares of the company currently trades at a whopping $519.61 a piece, based on latest Yahoo Finance data.

If you're in the mood for some fine-dining, then Del Frisco's Double Eagle Steakhouse is the place to be. The Texas-based restaurant chain's location in Midtown Manhattan is a perfect gastronomic stop after a day-tour of Times Square, Radio City Music Hall and the Rockefeller Center. The posh, three story-high restaurant offers an extensive menu of gourmet steak and seafood dishes that will delight guests' tastebuds.

The Del Frisco Restaurant Group (NASDAQ: DFRG) runs Del Frisco's Double Eagle Steakhouse as well as two more modern restaurant concepts: Sullivan's Steakhouse and Del Frisco's Grille. The company's stocks closed at $26.72 a piece on Thursday, down by 0.78 percent from its previous close. The company has a market capitalization of $631.29 million, Yahoo Finance data showed.

According to the company's February news release, the company's consolidated revenues increased by 16.9 percent to $271.8 million in 2013 from $232.4 million in 2012. Consolidated revenues from the fourth quarter of 2013 meanwhile increased by 20.5 percent to $97.5 million from $80.9 million, year-over-year.

DFRG is among the full service restaurants that have outpaced the Standard & Poor's 500 Index by 84 percent over the past year, according to Bloomberg.

Investors and analysts are betting on this restaurant for its expansion plans and solid revenues, of which 50 percent is derived from corporate diners and moneyed patrons, Bloomberg reported. The report also said the company plans to open five more Del Frisco's Grilles and one Double Eagle restaurant.

Desserts and Digestifs

The Cheesecake Factory (NASDAQ: CAKE) has over 10 restaurant locations in NYC to satisfy locals' and tourists' sweet cravings. Known for its sinfully good moist chocolate cakes and cheesecake flavors, the company has since been known for its delectable range of breakfast and brunch selections, and specialty sandwiches. It is also a nice place to grab a few drinks to cap off your meal.

Shares of the company closed at 46.97, Yahoo Finance data showed. The company has a total market capitalization of $2.38 billion. The company posted $1.87 million in earnings for fiscal year 2013, said NASDAQ.

Rounding off our list is Starbucks (NYSE: SBUX), another company that is not based in New York (its headquarters is in Seattle), but New Yorkers just cannot seem to resist. While most people won't bother spending $5 to $10 bucks for a signature coffee beverage, many New Yorkers won't think twice of doing so. At least that is the case for most teens who comprise 13 percent of the NYC population-a big market, considering that the NYC population is 8.405 million, based on recent U.S. Census Bureau data.

According to a survey conducted by Piper Jaffray senior analyst Nicole Miller Reagan for Talking Numbers, 11 percent of average-income teenagers and 12 percent of upper-income teenagers preferred limited-service company Starbucks. The survey also revealed Starbucks is the limited service company of choice of 59 percent of teenagers who prefer grabbing a bite at limited service food joints.

Miller Reagan also said that Starbucks is the only company to keep a double-digit market share in the said segment for the past seven years, and attributes Starbuck's success to its ability to diversify. Getting on the gluten-free food and health beverage trend, and the "hot-food platform," she said, will continue to increase Starbuck's following.

Latest Yahoo Finance data showed that Starbucks stocks traded at 70.15 a piece on Thursday, a 0.90 percent decrease from Wednesday's closing price. Revenue-wise, the company saw a 12 percent increase in consolidated revenues to $4.2 billion in the first quarter of 2014, according to its January news release.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.