Should You Add Denny's to Your Portfolio?

Another thing to watch out for in this specific case is the turmoil relating to a proxy war. Reuters offers a brief summary of the issue.

Now, let's check out the Q1 release which was posted after the bell. Denny's made 5 cents per share, a penny better than the previous year's net-income number. Analysts were looking for 4 cents per share, according to TheFly. Same-store sales weren't so hot, though: they went down 5.5% at company locations, and they were off by 6.3% at the franchised spots.

Overall, I'm not so impressed. I put a lot of weight behind same-store sales, and I would like to see them in positive territory.

I concede that, on a speculative basis, Denny's might offer the potential for a pop at some point. If the proxy skirmish ends up propelling a fundamental improvement in the company, or the perception that one is on the way at least, I can see short-term players being rewarded. It's a roll of the dice, one I am not willing to take at this juncture.

Although this stock doesn't represent the same kind of company, I would invest in a business like McDonald's Corporation (MCD) instead of one like Denny's. Just seems safer to me.

Disclosure: I don't own any company mentioned; positions can change without notice.