BloggingStocks

Benningan's, Steak and Ale go bankrupt as casual dining chains suffer

Jonathan Berr — 2008-07-29T15:30:00+00:00

Filed under: Bad news, Consumer experience, Cheesecake Factory (CAKE), Recession

Benningan's, the casual dining chain where I had many bad dates, and Steak and Ale, a chain I never visited, have filed for Chapter 7 bankruptcy protection, underscoring how cash-strapped diners are not finding deals like unlimited breadsticks all that tempting.

The two chains, which are owned by billionaire John Kluge, have been in financial hot water for months, according to The Wall Street Journal. The paper reports that the chains were so broke that they did not have enough money to pay their employees for the rest of the week.

"Metromedia Restaurant Group (Kluge's company) earlier this year violated several terms of a lending agreement with GE Capital Solutions," the Journal reports. "It had been in negotiations with lenders for months to stave off the filing, while closing some stores and looking for a buyer, said two people involved in the matter."

Rising labor costs and soaring prices for food are killing casual dining chains. Cheesecake Factory Inc. (NASDAQ: CAKE) recently reported disappointing second quarter results, which featured the biggest drop in same store sales in the dining chain's history. Last year, activist investor Nelson Peltz acquired a 14% interest in the company. Brinker International Inc. (NYSE: EAT), owner of Chilli's Bar and Grill, and IHOP parent DineEquity Inc. (NYSE: DIN) are both down by double digits this year.

There is no hope for a turnaround in these companies anytime soon. Much like diners in these establishments, investors in these stocks are in for a world of indigestion.

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Analyst downgrades: RCL, ALKS and ASML

Eric Buscemi — 2008-05-23T11:25:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, US Airways Group (LCC), Cheesecake Factory (CAKE)

MOST NOTEWORTHY: Royal Caribbean, Alkermes and ASML Holdings were today's noteworthy downgrades:

Morgan Stanley downgraded shares of Royal Caribbean (NYSE: RCL) to Equal Weight from Overweight to reflect margin concerns due to the high oil prices and lowered their target to $37 from $40. However, the firm maintains an Overweight rating on rival Carnival (NYSE: CCL).
Baird downgraded Alkermes (NASDAQ: ALKS) to Neutral from Outperform following the company's reduced Risperdal Consta guidance. The firm does not recommend buying shares.
UBS cut ASML Holdings (NASDAQ: ASML) to Neutral from Buy to reflect order uncertainty heading into 2009.

OTHER DOWNGRADES:

U.S. Airways (NYSE: LCC) was cut at Credit Suisse to Underperform from Outperform.
Goldman downgraded Cheesecake Factory (NASDAQ: CAKE) to Neutral from Buy.
Nordson (NASDAQ: NDSN) was lowered to Hold from Buy at Jefferies.

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Analyst upgrades: Restaurant sector, BBI and PLXS

Eric Buscemi — 2008-02-28T11:27:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Brinker Intl (EAT), Blockbuster Inc 'A' (BBI), Darden Restaurants (DRI), Cheesecake Factory (CAKE), Sotheby's (BID)

MOST NOTEWORTHY: The Restaurant Sector, Blockbuster and Plexus were today's noteworthy upgrades:

Bear Stearns upgraded the Restaurant Sector to Market Weight from Underweight citing better investor sentiment following Fed rate cuts and the economic stimulus plan; upgraded shares include Brinker International (NYSE: EAT), Cheesecake Factory (NASDAQ: CAKE) and Darden Restaurants (NYSE: DRI).
JP Morgan upgraded shares of Blockbuster (NYSE: BBI) to Overweight from Neutral ahead of the company's Q4 results on March 6, as they believe the quarter will be at least in-line and 2008 guidance will be above Street expectations.
Plexus (NASDAQ: PLXS) was raised to Outperform from Neutral at Credit Suisse as they believe current quarter sales and bookings are tracking ahead.

OTHER UPGRADES:

Maxwell Technologies (NASDAQ: MXWL) was upgraded to Market Perform from Market Underperform at JMP Securities.
The firm also raised Sotheby's (NYSE: BID) to Market Outperform from Market Perform.
Goldman Sachs added Allianz AG (NYSE: AZ) to its Conviction Buy List.

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Peltz acquires 14% stake in Cheesecake Factory

Zac Bissonnette — 2007-12-20T09:53:00+00:00

Filed under: From the boards, Competitive strategy, Cheesecake Factory (CAKE), Entrepreneurs, Bargain stocks

A fund affiliated with restaurant super-investor Nelson Peltz has acquired a 14% stake in Cheesecake Factory (NASDAQ: CAKE), sending shares of the dining chain up 10% on Wednesday.

The company said that it "has had a preliminary conversation with Triarc (Pelz's firm) already, and looks forward to continuing that dialogue."

According (subscription required) to the Wall Street Journal, "Mr. Peltz has bought stakes in several other restaurant and food companies, including Wendy's International Inc.(NYSE: WEN) and H.J. Heinz Co (NYSE: HNZ). At those companies, he has pressed directors and executives to sell brands, increase marketing or otherwise change their strategies in an effort to raise their stock prices. Mr. Peltz has said he prefers to work with existing management to effect change, though in the past his involvement has prompted reshuffling of company management and boards."

Cheesecake Factory has struggled to provide investors with strong returns over the past few years, and was scraping a multi-year low before the Petlz announcement sent the stock up.
As recently as January, there were rumors that Cheesecake Factory would be taken private at a big premium. At the time, I wrote that "If the Cheesecake Factory Inc. is taken private at a substantial premium to its current market cap of $2.1 billion, it will be looked at as a symbol of LBO-madness in the years to come."

Since then, Mr. Market has lopped $400 million off the stock's market value as the company has been unable to duplicate the strong growth it once enjoyed.

But Cheesecake Factory still has a very strong brand an exceptionally good numbers -- with 125 or so restaurants in operation, there could be ample room for growth.

It might be time for bargain hunters to look anew at this once-hot growth darling.

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Coupons underscore tough times for restaurants

Zac Bissonnette — 2007-11-12T17:34:00+00:00

Filed under: Consumer experience, Newspapers, Marketing and advertising, Cheesecake Factory (CAKE), Personal finance

It's a bad sign for restaurants: they're handing out coupons in an effort to lure reticent diners, who are nervous about gas prices, the economy and, of course, housing.

According to the USA Today, Ruby Tuesday is offering $5 off two dinner entrees, IHOP (NYSE: IHP) franchisees are handing out two-for-one coupons, Darden's (NYSE: DRI) Smoky Bones is giving diners $5 off $15 orders, and
T.G.I. Friday's is giving $5 "Bonus Bites" to those who purchase $25 gift cards.

So what's an investor to do? High gas prices and housing woes are most likely to weigh on the minds of middle-class consumers -- a wealthier diner probably isn't going to let his restaurant plans be interrupted by transportation costs.

Cheescake Factory (NASDAQ: CAKE) has seen its share prices slide as traffic growth has slowed. The company has scaled back its expansion plans and is using the extra cash to repurchase stock. Higher dairy prices have affected gross margins but, long-term, there's a lot to like here. The company has a strong brand, lots of room for expansion, and a much higher average check than a lot of the fast casual chains that are struggling.

A mall operator's efforts to prevent the chain from opening in a competitor's location underscores the company's strength: Cheesecake Factory is a destination in a way that lesser chains like Applebee's and Friday's aren't.

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Landlord wins $74 million in lawsuit with competitor over Cheesecake.

Zac Bissonnette — 2007-11-10T11:45:00+00:00

Filed under: Cheesecake Factory (CAKE)

A mall developer affiliated with Cheesecake Factory (NASDAQ: CAKE) just got $74 million richer after a jury found that the owner of the Glendale Galleria Mall attempted to block the chain from opening a location in the competing mall. And that's just the beginning.

According to The New York Times, "The Galleria's owner, General Growth Properties, is also facing the prospect of substantial punitive damages because the jury found the company acted with "malice, oppression or fraud" by interfering with negotiations between the restaurant chain and Caruso Affiliated Holdings, the developer of the new shopping center. The punitive damage phase begins on Tuesday."

With the restaurateur's shares languishing near a multi-year low, this could be a good time to look anew at this once-hot growth stock.

The company enjoys phenomenal per-store sales and profitability -- they're nearly always full and the food is pretty expensive -- and currently has around 123 stores. There could be a lot of growth left to be had here. And it all comes at just 20 times earnings.

And the lawsuit also highlights the company's competitive strength: The brand is strong enough that General Growth Properties sought to stop the company from opening a location at a rival's mall. Can you imagine this happening with Applebee's or a similar second-tier chain? This lawsuit shows just how powerful of a draw Cheesecake Factory is.

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Cheesecake Factory gets upgrade from SunTrust

Brent Archer — 2007-11-05T12:56:00+00:00

Filed under: Analyst upgrades and downgrades, Good news, Cheesecake Factory (CAKE), Options, Technical Analysis

Cheesecake Factory Inc. (NASDAQ: CAKE) shares are trading higher today after an analyst with SunTrust Robinson Humphrey upgraded CAKE from Neutral to Buy. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAKE.

After hitting a one-year high of $29.78 in April, the stock hit a one-year low of 21.45 on Friday. CAKE opened Monday morning at $22.03. So far today, the stock has hit a low of $21.98 and a high of $22.42. As of 11:05, CAKE is trading at $22.27, up $0.61 (2.8%). The chart for CAKE looks bearish and steady, while S&P gives the stock a 3 STARS (out of 5) neutral rating.

For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think, but still leverage nice returns. For this particular trade, we will make a 5.3% return in just seven weeks as long as CAKE is above $20 at December expiration. Cheesecake Factory would have to fall by more than 10% before we would start to lose money. Learn more about this type of trade here.

CAKE hasn't been below $20 at all in the past year, and has shown support around $21.50 recently. This trade could be risky if the company's recent downward trend continues, but even if that happens, this position could be protected by psychological support at $20.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in CAKE.

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Analyst initiations: Restaurant sector, AMSC and FSLR

Eric Buscemi — 2007-11-05T11:20:00+00:00

Filed under: Analyst reports, Yum Brands (YUM), U.S. Steel (X), Cheesecake Factory (CAKE), Analyst initiations

MOST NOTEWORTHY: The restaurant sector, American Semiconductor and First Solar were today's noteworthy initiations:

Friedman Billings resumed coverage of Cheesecake Factory (NASDAQ: CAKE) and Yum! Brands (NYSE: YUM) with Outperform ratings and a $30 target and a $46 target and Applebee's (NASDAQ: APPB) with a Market Perform rating and $25.50 target.
American Superconductor (NASDAQ: AMSC) was initiated with a Buy rating and $33 target at Jefferies, as they believe repeat orders for wind turbine electrical systems could drive rapid revenue growth from 2008-2010.
CIBC resumed coverage of First Solar (NASDAQ: FSLR) with a Sector Performer rating, as they believe shares are already pricing in the company's 2009 EPS potential.

OTHER INITIATIONS:

Morgan Stanley resumed coverage of Cablevision (NYSE: CVC) with an Underweight rating.
US Steel (NYSE: X) was initiated with a Sector Performer rating and $117 target at CIBC.
JP Morgan started SunPower (NASDAQ: SPWR) with an Overweight rating and Evergreen Solar (ESLR) with a Neutral rating.

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Airline industry ready for consolidation?

Zac Bissonnette — 2007-10-19T19:14:00+00:00

Filed under: Deals, Rumors, Newspapers, Cheesecake Factory (CAKE), Delta Air Lines (DAL)

How can a company emerge from bankruptcy and then, just about immediately, start looking for acquisition candidates? Isn't that like heading to The Cheesecake Factory, Incorporated (NASDAQ: CAKE) after the gastric bypass?

And yet Delta Air Lines, Inc. (NYSE: DAL) CEO Richard Anderson says the company is on the prowl. According (subscription required) to The Wall Street Journal, "Activist shareholders have been stirring the pot, too. Pardus Capital management, a big holder of UAL and Delta, is agitating for consolidation behind the scenes, a person familiar with the matter says. Meantime, an Icelandic investment fund has started pressing for change at AMR, which prompted the U.S.'s biggest carrier this week to say it is exploring options, including the splitting off of its frequent-flier business."

In most scenarios, it's a lot better to be the shareholder being bought out than a shareholder in the company doing the buying. This would appear to be no exception. With more labor-friendly forces likely to be taking control in Washington, and no end in sight to soaring gasoline prices, the airline industry is likely to face major challenges going forward.

Mergers and acquisition have a way of making problems worse, not better.

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Analyst upgrades 7-25-07: AMZN, CAKE, CFC, EXPE and UPS

Kevin Shult — 2007-07-25T11:43:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Good news, Amazon.com (AMZN), Countrywide Financial (CFC), Expedia Inc (EXPE), United Parcel'B' (UPS), Cheesecake Factory (CAKE), Stocks to Buy

MOST NOTEWORTHY: Countrywide Financial (CFC), Brandywine Realty Trust (BDN), Manhattan Associates (MANH), Spectrum Pharmaceuticals (SPPI) and Amazon.com (AMZN) were today's noteworthy upgrades:

Keefe Bruyette upgraded shares of Countrywide Financial (NYSE: CFC) to Market Perform from Underperform on valuation.

Brandywine Realty Trust (NYSE: BDN) was upgraded at Wachovia to Market Perform from Underperform based on pipeline progress and valuation.

JP Morgan upgraded Manhattan Associates (NASDAQ: MANH) to Neutral from Underweight following better-than-expected Q2 results.

Spectrum Pharmaceuticals (NASDAQ: SPPI) was upgraded to Hold from Sell at Brean Murry, expecting shares to remain stable into the spected Phase III initiation with Ozarelix coming in Q4.

Amazon.com (NASDAQ: AMZN) was upgraded by a host of companies following the strong quarter and margin growth, including JP Morgan, which upgraded shares to Neutral from Underperform. Bear Stearns upgraded shares to Peer Perform from Underperform, Lehman upgraded shares to Equal Weight from Underweight and Credit Suisse upgraded shares to Outperform from Neutral...

OTHER UPGRADES:

Merrill upgraded United Parcel Service (NYSE: UPS) to Buy from Neutral.

Goldman added AT&T (NYSE: T) to its Conviction Buy List.

Raymond James raised Cheesecake Factory (NASDAQ: CAKE) to Strong Buy from Outperform.

Kaufman upgraded Plantronics (NYSE: PLT) to Hold from Sell.

Matrix USA upgraded Expedia (NASDAQ: EXPE) to Hold from Sell.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

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Cheesecake Factory on the move after topping Street estimates

Beth Gaston Moon — 2007-07-24T17:25:00+00:00

Filed under: After the bell, Earnings reports, Good news, Cheesecake Factory (CAKE)

As Jonathan Berr reported minutes ago, Cheesecake Factory (NASDAQ: CAKE) is among the tens of names to travel into the earnings confessional after today's closing bell. The company announced second-quarter profit of $23.7 million, or 33 cents per share, up from year-ago results of $23.4 million (30 cents per share). Revenue jumped 16% higher during the period to $373.2 million, and same-restaurant sales were up 1.1%.

Both of the key figures - per-share earnings and revenue - were higher than analysts' respective estimates of 31 cents and $372 million.

During the three-month period, the company opened two new locations and is on track to open 21 new restaurants by the end of 2007.

In an accompanying press release, company Chairman/CEO David Overton noted that the firm's "positive comparable sales reflects our strong positioning." Mr. Overton also added that a planned 1.5% increase in menu pricing should work to "offset known cost pressures for the second half of the year."

After losing 1.6% in regular trading today, CAKE shares have risen 2.6% in after-hours action.

I would not describe myself as a foodie, but I'm a little snobby when it comes to my restaurant picks, particularly if I'm traveling in an area especially known for its cuisine. So while I wouldn't pop into one of CAKE's 125 locations on a vacation, it is definitely among my favorite chains. A ginormous, inventive menu, portions that provide more than enough to share, sinful desserts, and the best melon martini I've ever tried help set the chain apart from its rivals.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

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Analyst upgrades 6-22-07: CAKE, CROX, DRI, KFT and MGM

Kevin Shult — 2007-06-22T11:01:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Good news, Darden Restaurants (DRI), Cheesecake Factory (CAKE), Kraft Foods'A' (KFT), Crocs Inc (CROX)
MOST NOTEWORTHY: Cheesecake Factory (CAKE), Jabil Circuit (JBL), MGM Mirage (MGM), Darden Restaurants (DRI) and Crocs (CROX) were today's more noteworthy upgrades:

Robinson Humphries upgraded Cheesecake Factory (NASDAQ: CAKE) to Neutral from Reduce citing limited downside risk.

Jabil Circuit (NYSE: JBL) was raised to Outperform from Neutral at Credit Suisse and to Outperform from Sector Perform at RBC Capital based on its better-than-expected Q3 report.

CIBC upgraded MGM Mirage (NYSE: MGM) to Sector Outperform from Sector Perform and gives the odds of a takeout at 50/50 but said business remains healthy and that the value of Las Vegas Strip assets should continue to rise for the next several years. Susquehanna said Kerkorian's decision not to pursue the Bellagio and CityCenter assets is a strong vote of confidence in MGM's management to create shareholder value and upgraded shares to Positive from Neutral.

Darden Restaurants (NYSE: DRI) was upgraded to Buy from Hold at Matrix based on management's positive steps to improve economic profit by selling off its under-performing units.

ThinkEquity upgraded Crocs (NASDAQ: CROX) to Buy from Accumulate on expectations that sales will continue to be strong driven by new product introductions, as well as retail doors and square footage growth...

OTHER UPGRADES:

Goldman upgraded Kraft Foods (NYSE: KFT) to Neutral from Sell.

Baird upgraded Pentair (NYSE: PNR) to Neutral from Underperform.

Citigroup upgraded AES Corp (NYSE: AES) to Buy from Hold.

Credit Suisse upgraded Sohu.com (NASDAQ: SOHU) to Outperform from Neutral.

Raymond James upgraded Pier 1 Imports (NYSE: PIR) to Outperform from Market Perform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

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Cheesecake Factory downgraded on higher dairy costs, industry softness

Kevin Shult — 2007-06-21T14:29:00+00:00

Filed under: Major movement, Analyst upgrades and downgrades, Forecasts, Bad news, Cheesecake Factory (CAKE)
Shares of Cheesecake Factory Inc (NASDAQ: CAKE) fell more than 7% today after management lowered its second quarter earnings guidance, citing industry-wide softness and higher dairy costs. The company forecast second quarter revenue would increase 14.5% to 15.5% and quarterly margins would be down 1% year-over-year.

Earlier today, Bear Stearns downgraded shares of Cheesecake Factory to Peer Perform from Outperform on the news. Bear Stearns expected Cheesecake to show revenue growth of 16-17%, or 34c per share. CIBC World Markets followed suit and downgraded shares to Sector Perform from Outperform on the news.

Raymond James cut shares to Outperform from Strong Buy, expecting shares of the restaurant to trade lower in the near-term. The analyst still considered Cheesecake a good long-term buy, given the likelihood that dairy prices will retreat in time.

Despite the downgrades, most firms on the Street see Cheesecake Factory in a positive light. Freidman Billings, which reiterated its Outperform rating on the stock this morning, still considers the restaurant to be one of the better-positioned companies in the sector and highlighted its favorable risk-reward profile.

William Blair feels that management's negative commentary suggests that consensus estimates have been too high. When looking at the casual dining sector, one has to acknowledge that the sector has been hurting from higher gas prices. Add higher dairy costs and overall higher food costs and expectations for the industry must be lowered.

If the price of crude continues to move north, I would expect consensus to trim their expectations not only for Cheesecake Factory, but for the industry as a whole.

As of 2:00 pm, shares of CAKE have been down 7.25% or $1.94 to $24.81.

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Analyst downgrades 6-21-07: AT, BWLD, CAKE, HD and ODP

Kevin Shult — 2007-06-21T11:43:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Bad news, Home Depot (HD), ALLTEL Corp (AT), Office Depot (ODP), Cheesecake Factory (CAKE)
MOST NOTEWORTHY: Cheesecake Factory (CAKE), Buffalo Wild Wings (BWLD), Alltel (AT), Home Depot (HD) and Nokia (NOK) were today's more noteworthy downgrades:

Cheesecake Factory (NASDAQ: CAKE) was downgraded to Sector Perform from Outperform at CIBC, to Outperform from Strong Buy at Raymond James and to Peer Perform from Outperform at Bear Stearns after the company reduced its second quarter guidance.

Buffalo Wild Wings (NASDAQ: BWLD) was cut to Neutral from Buy at Merriman on valuation.

Lehman downgraded Alltel Corp (NYSE: AT) to Equal Weight from Overweight as the firm doesn't expect a competing bid for the company.

Home Depot (NYSE: HD) was cut to Market Perform from Outperform following yesterday's rally and feels that with the HD sale out of the way, the focus will now turn to Home Depot's ability to grow in the challenging do-it-yourself retail market. Goldman cut Nokia to Neutral from Buy on valuation...

OTHER DOWNGRADES:

JP Morgan cut Headwaters (NYSE: HW) to Underweight from Neutral.

Citigroup downgraded Prudential Financial (NYSE: PRU) to Hold from Buy.

Matrix USA cut Phototronics (NASDAQ: PLAB) to Sell from Hold.

Ferris, Baker downgraded Gladstone Commercial Corp (NASDAQ: GOOD) to Neutral from Buy.

Citigroup removed Office Depot (NYSE: ODP) from its Citi Recommended List.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

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Analyst downgrades 6-08-07: NKE, FL, TLAB, ADTN and BKHM

Eric Buscemi — 2007-06-08T10:24:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Allergan (AGN), Lowe's Cos (LOW), Cheesecake Factory (CAKE)
MOST NOTEWORTHY: Nike Inc (NYSE: NKE), Foot Locker Inc (NYSE: FL), Tellabs Inc (NASDAQ: TLAB), ADTRAN, Inc (NASDAQ: ADTN) and Bookham, Inc (NASDAQ: BKHM) were today's noteworthy downgrades:

Banc of America downgraded shares of both Nike and Foot Locker to Neutral from Buy, as the firm believes industry pressures in the U.S. could more than offset the potential turn in Europe and benefit from the 2008 Olympics.

Cowen downgraded shares of ADTRAN, Bookham and Tellabs to Neutral from Outperform.

Goldman Sachs also downgraded shares of Tellabs, to Sell from Neutral, as the firm believes the stock fully discounts the expected sales and margin improvement.

OTHER DOWNGRADES:

Allergan Inc (NYSE: AGN) was downgraded to Equal Weight from Overweight at Morgan Stanley citing limited upside.

Friedman Billings removed The Cheesecake Factory Incorporated (NASDAQ: CAKE) from its Top Picks and maintained its Outperform rating.

Lehman downgraded shares of The First American Corporation (NYSE: FAF) to Equal-Weight from Overweight on increasing risk to the company's title margin and regulatory concerns.

Matrix USA downgraded shares of Lowe's Companies Inc (NYSE: LOW) to Buy from Strong Buy on valuation.

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Cramer's take on private equity eating Cheesecake (Factory)

Jon Ogg — 2007-04-25T21:05:00+00:00

Filed under: Private equity, Cheesecake Factory (CAKE)
Jim Cramer's "private equity buyout target" tonight was Cheesecake Factory (NASDAQ:CAKE). He doesn't care that the company is up 10% after earnings and he doesn't think it is too late to get on board. He likes that the cash flows aren't living up to their potentials. He thinks this would be easy to turn around. CAKE can actually raise its prices because they are low for quantity and quality. Privateers could bolster its supply side, do a little more brand promotion via advertising, add more stores and close underperforming stores. In addition to looking attractive to private equity, the Cheesecake Factory CEO is the son of the company's founders and the shares should be a lot higher.

Cramer did claim that he is practicing "sane investing in an insane world" and he stressed to only buy companies that you want to own anyway. So at least he specified this after a couple nights of forcing the goo-goo-ga-ga love for buyouts the last two nights. Thankfully, he restated that tonight. You HAVE TO like a stock you buy for the fundamentals (or at least the technicals) instead of just for a buyout pick. The one thing that is funny about this pick is that I was doing some work on this one for my own reviews of it as a buy on its own, without being a buyout potential. I also determined it could raise prices, like Cramer noted, but I thought of something else as well. Food is a huge portion of a restaurant's operating costs, and if you have ever ordered an entrée at Cheesecake Factory or at Grand Lux you will agree (even if Cramer didn't note it) that these entrees are way too large for one person. CAKE could easily trim 5% to 10% off of its portions and not change prices. The savings would go 100% to the bottom line.

As far as the other data, the 23.6 forward P/E ratio isn't cheap and the 12-times cash flows isn't dirt cheap. But a revved-up management team could easily fix both of these. Both the hallmark Cheesecake Factory and the Grand Lux are better brands than others and these restaurants are rarely operating without being full, from my own personal experience. So if you make the argument that prices can be hiked and it can chop costs, then it's actually possible and the numbers could be far better than they have been.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

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Analyst upgrade 4-15-07: ABFS, ALU, AMZN and CAKE upgraded today

Kevin Shult — 2007-04-25T11:33:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Good news, Amazon.com (AMZN), Alcatel-LucentADS (ALU), Cheesecake Factory (CAKE), Arkansas Best (ABFS)
MOST NOTEWORTHY: Whirlpool Corp (WHR), Amazon.com, Inc (AMZN), Arkansas Best Corp (ABFS) and Capital One Financial Corp (COF) were today's more noteworthy upgrades:

Citigroup upgraded Whirlpool Corp (NYSE: WHR) to Hold from Sell with a $107 target after better-than-expected Q1 results.

Amazon.com Inc (NASDAQ: AMZN) was upgraded to Market Perform from Underperform at Piper Jaffray, to Hold from Sell at Citigroup, to Neutral from Underperform at Cowen, to Sector Perform from Underperform at Pacific Crest and to Buy from Hold at BWS Financial.

Elsewhere, Stephens raised Arkansas Best Corp (NASDAQ: ABFS) to Equal Weight from Underweight with a $30 target.

Bernstein upgraded Capital One Financial (NYSE: COF) to Outperform from Market Perform...

OTHER UPGRADES:

Key Bank Capital Markets upgraded Cheesecake Factory Inc (NASDAQ: CAKE) to Buy from Hold.

Alcatel-Lucent (NYSE: ALU) was upgraded to Buy from Neutral at Goldman.

Stifel upgraded Advance Auto Parts, Inc (NYSE: AAP) to Buy from Hold with a $48 target.

UBS raised Yamana Gold Inc's (NYSE: AUY) rating to Neutral from Reduce.

Longbow Research upgraded Parker Hannifin (NYSE: PH) to Buy from Neutral.

Lehman upgraded American Standard Cos (NYSE: ASD) to Buy from Hold with a $50 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

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If I knew you were coming I'd have baked a CAKE

Beth Gaston Moon — 2007-04-24T15:50:00+00:00

Filed under: After the bell, Earnings reports, Cheesecake Factory (CAKE)
I will be forever grateful to a bartender at a Cheesecake Factory (NASDAQ: CAKE) in suburban Cincinnati, who shared with me the basic recipe for its delectable melon martini ... melon vodka (I use SKYY), melon liquor (such as Midori), pineapple juice, and simple syrup. With a few failed attempts at getting the proportions just so, my husband and I are able to create this fun frou-frou drink in the comfort of our own home.

Hopefully fans of the eatery haven't learned to recreate the popular food items and sweets from the CAKE menu, lest the company's bottom line be negatively impacted. The firm is scheduled to report its first-quarter results after the closing bell; according to FactSet Research Systems, analysts are currently expecting per-share earnings of 24 cents, equal to last year's figures.

Technically speaking, CAKE has been rather unappetizing of late, inching slowly lower in a tight range between 30 and 26. Helping stifle any short-lived advances in the stock has been its 20-day moving average, a menacing overhead presence.

Heading into its report, the sentiment picture is mixed for the shares. Short interest is notable, accounting for more than 16% of the equity's float and representing a short-interest ratio of 10 days to cover. But analysts are relatively chipper. Zacks reports that CAKE has earned nine "strong buy" ratings, two "buys," six "holds," and one "sell." As such, the expectations bar could be set a notch or two higher as the earnings report approaches.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

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Analyst initiations 3-28-07: GOOG, YHOO, TWC & CAKE were all initiated today

Kevin Shult — 2007-03-28T10:46:00+00:00

Filed under: Before the bell, Google (GOOG), Yahoo! (YHOO), Merrill Lynch (MER), Goldman Sachs Group (GS), Morgan Stanley (MS), Cheesecake Factory (CAKE), Analyst initiations, Time Warner Cable (TWC)
MOST NOTEWORTHY: Time Warner Inc (TWX), Google Inc (GOOG), Yahoo! Inc (YHOO) and Cheesecake Factory Inc (CAKE) filled out today's more notable initiations:

Oppenheimer expects Time Warner Cable (NYSE: TWC) to benefit from double-digit free-cash-flow growth over the next five years as it integrates Adelphia's (ADELQ) systems. The firm initiated shares with a Buy rating and $47 target.

AG Edwards initiated Google Inc (NASDAQ: GOOG) with a Buy rating and $550 target to reflect the company's current business model and search growth. Nollenberger also initiated shares of Google with a Buy rating and placed a $575 value on just the core business.

AG Edwards initiated shares of Yahoo! Inc (NASDAQ: YHOO) with a Buy rating and $35 target, expecting Panama to drive ad revenue. Nollenberger started Yahoo! with a Neutral rating saying the company is still a a "solid name" but believes shares are not cheap.

Baird started Cheesecake Factory (NASDAQ: CAKE) with a Neutral rating on valuation.

OTHER INITIATIONS

Lehman Brothers initiated four large-cap brokers: Merrill Lynch & Co (NYSE: MER) and Bear Stearns Cos (NYSE: BSC) were started with Overweight ratings, while Goldman Sachs Group (NYSE: GS) and Morgan Stanley (NYSE: MS) were initiated with Equal-Weight ratings. Lehman believes broker dealers are winning greater share of global capital-markets revenue from commercial banks as the products available for managing risk and capital become more sophisticated.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

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Before the bell 3-20-07: SIRI, AAPL, PALM, CAKE, F ...

Melly Alazraki — 2007-03-20T08:31:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), Wal-Mart (WMT), Intel (INTC), Ford Motor (F), General Motors (GM), XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI), Advanced Micro Dev (AMD), Palm Inc (PALM), Cheesecake Factory (CAKE), Dow Chemical (DOW)
Main market news here.

Investors of satellite radio will stay tuned today as a Senate Judiciary subcommittee will hear testimony on the proposed merger between Sirius Satellite Radio Inc. (NASDAQ:SIRI) and XM Satellite Radio Holdings Inc. (NASDAQ:XMSR). The Antitrust, Competition Policy and Consumer Rights Subcommittee will consider the deal.

Cheesecake Factory Inc. (NASDAQ:CAKE) is having an Investor Day today where it would brief analysts about the company's long-term growth plans. When CAKE last reported financial reports, it posted declining profits and raised concerns about the coming year. It should be interesting to hear what management has to say about a month later.

According to sources, Palm Inc. (NASDAQ:PALM) may finally agree to a long-rumored buyout deal worth $20 per share. The deal might take place by the end of this week. Palm reports financial results Thursday. While management prefers to sell to private equity, Motorola Inc. (NYSE:MOT) and Nokia Corp. (NYSE:NOK) may also be bidding.

The Wall Street Journal says that Apple Inc. (NASDAQ:AAPL) could see much higher Macintosh personal computers sales [subscription required] after the company switched to an Intel Corp. (NASDAQ:INTC) chip that allows the Macs to run Microsoft Corp.'s (NASDAQ:MSFT) Windows operating system.

President George W. Bush will be touring Ford Motor Co. (NYSE:F) and General Motors Corp. (NYSE:GM) factories in the Kansas City. While Bush is interested in seeing their latest hybrid cars and energy alternatives. Despite Bush saying that bailouts are out of the question, auto makers still want an audience to press other concerns.

Well, for once, Yahoo! Inc. (NASDAQ:YHOO) has made a move ahead of its nemesis Google Inc. (NASDAQ:GOOG). Yahoo introduced yesterday a new internet search system for mobile phone users that delivers locally relevant answers.

Wal-Mart Stores Inc. (NYSE:WMT) withdrew its request to trademark the acronym for "everyday low prices" yesterday after 17 retailers and trade associations opposed the application.

Dow Chemical (NYSE:DOW) was upgraded at HSBC Securities from Neutral to Overweight and SanDisk (NASDAQ:SNDK) was upgraded by CIBC World Markets from Sector Perform to Sector Outperform. HSBC Securities also lowered Its Neutral rated Advanced Micro Devices (NYSE:AMD) target price from $17 to $15.

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