A fund affiliated with restaurant super-investor Nelson Peltz has acquired a 14% stake in Cheesecake Factory (NASDAQ: CAKE), sending shares of the dining chain up 10% on Wednesday.

The company said that it "has had a preliminary conversation with Triarc (Pelz's firm) already, and looks forward to continuing that dialogue."

According (subscription required) to the Wall Street Journal, "Mr. Peltz has bought stakes in several other restaurant and food companies, including Wendy's International Inc.(NYSE: WEN) and H.J. Heinz Co (NYSE: HNZ). At those companies, he has pressed directors and executives to sell brands, increase marketing or otherwise change their strategies in an effort to raise their stock prices. Mr. Peltz has said he prefers to work with existing management to effect change, though in the past his involvement has prompted reshuffling of company management and boards."

Cheesecake Factory has struggled to provide investors with strong returns over the past few years, and was scraping a multi-year low before the Petlz announcement sent the stock up.
As recently as January, there were rumors that Cheesecake Factory would be taken private at a big premium. At the time, I wrote that "If the Cheesecake Factory Inc. is taken private at a substantial premium to its current market cap of $2.1 billion, it will be looked at as a symbol of LBO-madness in the years to come."

Since then, Mr. Market has lopped $400 million off the stock's market value as the company has been unable to duplicate the strong growth it once enjoyed.

But Cheesecake Factory still has a very strong brand an exceptionally good numbers -- with 125 or so restaurants in operation, there could be ample room for growth.

It might be time for bargain hunters to look anew at this once-hot growth darling.