Cramer on BloggingStocks: Restaurants right for the taking

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TheStreet.com's Jim Cramer says Panera is one company that has plenty of room for expansion.

If the restaurant stocks are stabilizing after a real downturn that has lasted for several weeks, this group -- a leadership group from the fall when gasoline fell in price -- is going to have a wicked move back.

I like Yum! Brands (NYSE: YUM) (Cramer's Take), which never broke down. This is one in which technicians signaled weakness, with Top Gun Rick Bensignor and I going head to head on "Mad Money." He was right that it initially would downtick, but I think it is bottoming along with McDonald's (NYSE: MCD) (Cramer's Take). It's got the growth and it has good tumbling raw costs. The dollar's going the way for both stocks.

The one, however, that did the best that has fallen the hardest is Panera Bread (NASDAQ: PNRA) (Cramer's Take). This one's controversial because some people thought it was having a hard time opening more stores, an initial warning sign that spooked people out of California Pizza Kitchen (NASDAQ: CPKI) (Cramer's Take) correctly a few years back. I think the company was just being conservative and has plenty of room to expand and its raw costs as well as its advertising costs are coming down.

The group does tend to take up everything. Darden (NYSE: DRI) (Cramer's Take) and Brinker (NYSE: EAT) (Cramer's Take) have leveled off. Everything but Burger King (NYSE: BKC) (Cramer's Take) and Domino's (NYSE: DPZ) (Cramer's Take) seems to be in pretty good shape. Oil's behaving for the moment and is having a hard time getting past $60.

If you think the group is right I think Panera makes a stand here. I have liked this stock -- and the food -- for five years and have stuck with it. The stock's been a real dog, but I think that it should never have broken down here after that good quarter and it and the group -- brought low recently by fears of "no-go-out" swine flu -- seem right for the taking.

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Yum! Brands.

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Last updated: February 10, 2010: 02:43 AM

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