Mr. O'Cull: Our coverage is evenly split between casual dining and fast food stocks. Our "buy" recommendations are with companies where we believe there is a good margin of safety, and where we believe a turnaround plan could lead to better performance. Some of our recommendations are viewed as contrarian calls because there is not a clear catalyst.
TWST: How would you characterize the restaurant industry so far in 2010?
Mr. O'Cull: It has been a volatile year for same-store sales. For example, the casual dining space showed some recovery signs at the beginning of the year, but sales lost some momentum in April. We think some investors expect July's easy comparisons and holiday shift may provide a positive sales month, but we expect 2010 to be a very volatile year for restaurant sales. Consumer spending has been very choppy.
Tickers included in this excerpt: CAKE, CBRL, DIN, EAT, JACK, MCD, PNRA, SONC, WEN
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