Buffalo Wild Wings: Fatten you up?

Investors were thrilled, sending the stock shooting up 34% yesterday, or $7.51, to $29.42. The past year's chart is quite the thrill ride, with a high at $44.98 in September before the disappointment in November, after which BWLD plunged to $14.50. And the story everyone seems to be telling: it's all about the cash. The company has no debt (definitely a positive in an environment where many are questioning the longevity of credit lines) and has cash on the balance sheet, though as Alyce Lomax at the Motley Fool notes, the company's negative free cash flow is worrisome.

As I see it, Buffalo Wild Wings and many purely indulgent -- but in no way luxurious -- restaurants of its ilk have a lot of room for growth. The company's restaurants may be more expensive than the sensible alternative (staying at home to drink beer and watch "the game") but it's also affordable on even a restricted income. Can you cook wings at home cheaper than at BWLD? Probably not, and if you're cutting back on cable and wide screen TVs, you may not have a choice. The company's ingredients are unlikely to increase greatly in price compared to other restaurants, and the limited menu could be a boon. It's even possible that a poor economy is great for restaurants like this, where the typically short-tenured staff suddenly becomes loyal due to job losses all around them. Would you job hop in this economy? I sure wouldn't, and if I'm unable to go out for a steak dinner, I'll probably drown my sorrows in four flavors of spicy hot wings. I'd look to BWLD to have another good quarter to come, and at least end up in the mid-$30s by late spring.