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Analyst Interview Excerpt
OUTLOOK FOR RESTAURANT STOCKS: MATTHEW DIFRISCO - THOMAS WEISEL PARTNERS
Full article published: 3/20/2006    


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TWST: Certainly the restaurant industry has been busy lately. What's your take on what's going on and what stirred up all of this activity?
Mr. DiFrisco: I think that the restaurant stocks have historically been an attractive growth engine, and some of the growth has slowed. People have thought of other ways to unleash some shareholder value, especially by looking at the assets, the land and the real estate prices that we've seen across the board in this country. They are large landowners and maybe they're not being valued for that in the public market, so they're trying to monetize or unleash that value.

TWST: Was there a trigger or is this just something that has been coming on?
Mr. DiFrisco: No, I think there's been a little bit less of a growth story, as far as comparable sales growth, on the traffic side. It's been a little bit slower in the last two years, and it's been pretty price driven. I think that investors are saying, 'We're in a world of 1% or 2% comp, and the restaurants have gotten a little bit older and more mature. Lets take a look at the balance sheet, where there might be something they're not getting value for. It has traded a little flat over the last year or so.' So as the stock performance has slowed with their top-line growth a little bit, they're trying to unleash some value, rather than just focusing on them as growth names.

 

Tickers included in this excerpt: APPB, CAKE, CMG, DRI, EAT, MCD, MSSR, OSI, PFCB, RARE, RI, SBUX, TXRH, WEN


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For more information call (212) 952 7400. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.

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