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America Is Dinning Out!

|Includes: Burger King Holdings Inc. (BKC), BWLD, CAKE, CMG, EAT, JACK, PFCB, PNRA

Restaurant stocks have been soaring this week.  The recent rise got an exclamation jump yesterday, Wednesday, when BKC was rumored to be actively seeking a buyer.  BKC shares jumped +14.7% on nearly 15 times the average trading volume!  Well, this buyout rumor came out to be very true and it happened a day after!  This morning, BKC announced that it had agreed to sell itself to investment firm 3G Capital for $3.26 billion.  This deal valued BCK at $24/share.  BKC shares flew higher again to close at $23.59, up another +25%; this time on almost 50 times the average volume.

Well, the BKC deal has whetted investors appetite for restaurant stocks, searching for the next potential deal, especially when the buyer of BKC is an investment firm and not another restaurant company.

CMG, Chipotle Mexican Grill, Inc., has been gapping higher on exceptional earnings after each of the last 3 quarters.  CMG took a quick dip to the $145 level recently, but, closed at $164.19 today, up about $15 in just the past 2 days!  Market Cap: 5.1 billion

PNRA, Panera Bread Company, has seen a bit more rocky roads in its stock movement this year.  Back in April, it set a new all-time high at $88.68, only to plunge back down to $72 after its earnings report.  In the recent weeks, while the broader market has been trending south, it has recaptured investors attention.  It climbed back to $80/share before BKC's rumor.  It closed at $85.21 today.  Market Cap:  2.65 billion

CAKE, The Cheesecake Factory Inc., has not faired well this year as a stock although it is very famous for its cheesecakes!  It traded above $30/share back in April, but, was recent unchanged for the year (around $22) until the recent jump.  It closed just under $25/share today.  Market Cap:  $1.48 billion

JACK, Jack In The Box Inc., has traded up about +10% in the past 2 days.  Its all-time high is at $39.77 set back in May of 2007.  It closed at $22.15 today.  It's trading volume today was about 3 times the average volume.  Market Cap:  $1.22 billion

BWLD, Buffalo Wild Wings, Inc, took a huge drop after its earnings report in April, falling from $52 to $42 and continued to sink down to $36/share!  Its earnings in July was positive, but was not enough to convince investors.  In the past 2 days, it has jumped from $42 to now $45.63.  Market Cap:  $830 million

EAT, Brinker International Inc., vaulted +9.32% on BKC's news today, highest in the sector.  Brinker Internation operates under the Chili's Grill & Bar and Maggiano's Little Italy brand names.  It also has restaurants in more than 30 countries.  Market Cap:  1.85 billion

PFCB, P.F.Chang's China Bistro, Inc, was strong even before BKC's rumor, and finally broke above the resistance at $44 today, closing up +4.78% at $46.21.  P.F.Chang's China Bistro serves Chinese food, albeit more westernized, in a more "cultured" setting that's on a par with The Cheescake Facotry.  It's market cap is reasonable and could be a good investment with or without a buyout.  Market Cap:  $1.07 million

The above are stocks that I selected from the restaurant group with significant jump in stock value this week with noticeable volume increase, and, with a market cap of about $5 billion or under.  M&A frenzy is on and some of the rumors out there are very real.  Just look at BKC!  Even without the actual buyout, speculations alone can drive these stocks higher.  The latest consumer spending and consumer confidence data were up, and, it looks like America is dinning out!

Good night and HappyTrading! ™

Disclosure: no positions