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.











Reader Comments (Page 1 of 1)
5-15-2009 @ 11:08AM
Iridium said...
Everything about the mentality of trading stocks is just wrong for the economy. All that matter to Cramer and Co. is the bottom line that affects the share price. that is how they make money. They do not provide anything of real value to the economy.
Yum! Brands is quite possible the worst managed corporation in the world. The corporate philosophy is reduce labor costs as much as possible. Stores that have the lowest labor cost per sales get big plaques.
If labor goes above a certain percentage they must send workers home. They also force employees making minimum wage to take management roles without management pay. Workers are stretched thin and the food quality and customer service suffers.
At the end of the day this creates a terrible working enviroment and hurts the real economy. That doesn't matter though because all the cost cutting and slave labor creates a nice healthy bottom line. That is all that really truly matters, increased bottom line means increased share price.
The entire business of trading stock has ruined the economy. It has created downward preassure on wages and rewarded the reduction in manpower. It has forced worker productivity to rise by adding increased workload due to making one person do the job of three.
A corporation that cuts people should not be rewarded with a higher price per share. It should be punished. Without people there is no economy. Cramer and Co. seem to forget that.
5-15-2009 @ 3:24PM
beachpaul said...
So, Jimbo, we have regained the DOW 8200-8300 floor. Now we are back to January. When we going back to 9,000 you ol' bull. Oh, and give me a peanut butter and jelly sandwich. Panera serves a good one.
5-15-2009 @ 3:44PM
Gary said...
I thought he was talking about restaurants, then he brought up YUM and those others, those aren't really restaurants, they are junk food eateries.
5-16-2009 @ 8:52AM
June said...
Too bad that Mr. Cramer can't speak or write.
5-16-2009 @ 5:36PM
Jim Cram It said...
Jim Cramer is the biggest shill for corporations that brought down the American economy. He should invest in restaurant stock that eats crow because he'll be eating plenty of it as he screws up again on his predictions. Oil prices are going up and won't back down much even during the worst economy ever as oil companies squeeze consumers for lost record profits. Oil prices eat into transporting of restaurant supplies and will erode restaurant stocks further.
5-16-2009 @ 8:21PM
Paul Rink said...
Sorry, I do Not see Restaurant Stocks returning to any value for at least 3 to 5 years. I project the value of the markets will drop between 40 and 50 Percent by end of Summer
5-17-2009 @ 10:47AM
THINK said...
Cramer. The man for the "people", man who does this out of the kindness of his heart. Booyah, shmooyah, bullcrapooyah. He is nothing but another market manipulator. The whole market is nothing but a joke. It used to be based on something concrete, now, its based on.....speculators, driving the market. Of course you have the SEC one of the most useless limbs of government, playing right along with it. Please tell me how oil where there is an oversupply can have a rally. Whatever happened to pure economics of supply and demand. LOGIC. Not some 30 year old buffoons with multiple monitors and other peoples money "playing" roulette with our futures. Personally, Vegas is a better gamble, go play blackjack, you have better odds. People like Cramer, are the Dr.Phils of finance, entertainers who have a following of sheep. Watch what will happen to his "recommended" restaurant stocks. They will dive, everything he recommends, dives. His "noprofit" fund, shorts them.