This post is part of a seven article report -- Food for thought: Best bets in food & beverage stocks.

"Customers are trading down to McDonald's (NYSE: MCD) from higher-end restaurants," says growth stock expert Toby Smith in his ChangeWave Investing.

The fast food operator is also a buy from Bill Martin, who adds, the company continues to serve up solid results. In his BullMarket.com advisory, he reviews the stock's recent quarter.

First, Toby Smith explains, "Given the endless parade of depressing economic news, it's no wonder that most people have lost their appetite for food -- if not altogether, then at least for the finer dining.

"Our proprietary ChangeWave Alliance survey -- ongoing pols of thousands of individuals and investors in various industries and professions -- just 5% of respondents said they would spend more at restaurants, which is unchanged from the all-time low.

When shares of Denny's Corp. (NASDAQ: DENN) are trading at half the price of a Grand Slam Breakfast, yet it was one of the companies willing to drop big bucks on a Super Bowl ad, I gotta jump in my car and get down to Denny's to see what's gone wrong.

Problem is, nothing has gone wrong. They are just as crowded as ever, especially during this recession.

They represent a full sit-down meal destination at fast-food prices. And the portions are big.

The company has totally restructured, selling off franchises and keeping all the best locations for its own portfolio -- and the results are pouring in.

On Jan. 15, the company said it expects to meet or exceed its previous guidance for full-year 2008, thanks to the success of the Franchise Growth Initiative (FGI) and other cost-saving actions that protect margins and cash flow.

With the stock trading around $1.50 per share, it's time to consider whether Denny's is some low-hanging fruit ready for the picking.

Bryan Perry is a contributor to OptionsZone.com.

I've held the anti-restaurant thesis for several weeks now, and I think the two reports after the bell yesterday validated the thoughts. Commodity costs are up, labor costs are increasing (and will to continue to increase) with the rise in the minimum wage, the increase in gas prices crunches the consumer's spending power, and so on.

CEC Entertainment (NYSE: CEC), the operator of Chuck E. Cheeses restaurants, reported earnings of 26 cents per share vs. expectations of 34 cents per share. In addition, same-store-sales fell 1.6% while operating costs rose 4%. Interestingly, the company attributed its poor performance not only to gas prices, but also popular new movie releases which drew its young-children demographic out of its restaurants and into movie theaters. If this wasn't enough, CEC cut its full year guidance to $1.96-$2.04 per share -- a rather significant difference from the analyst estimates of $2.26 per share before this report.

Similarly, Panera Bread (NASDAQ: PNRA) disappointed the street after the bell. As Beth Gaston Moon reported, the company's guidance for the coming quarter of 32-38 cents per share in EPS came in below prior analyst expectations of 43 cents. In addition, the company's guidance for the second half of the year of $.86-1.02 per share disappointed analysts who expected $1.12 per share.