"Fast-casual restaurants are sizzling as consumers trim their eating budgets; this trend is helping Panera Bread (NASDAQ: PNRA)," says Michael Cintolo in The Cabot Top Ten Report.
"In restaurant parlance, 'fast-casual' eateries are higher priced than fast-food chains such as McDonald’s and KFC, but cheaper than casual dining restaurants such as Applebee’s and Denny’s.
"The company is also on top of another trend, one that we expect will last longer than the current recession -- and that’s the trend to healthy eating. Panera’s breads, salads and sandwiches feature antibiotic-free chicken, whole grain bread, organic and all-natural ingredients.
"Just this month in fact, Health magazine named Panera Bread the healthiest restaurant in the fast food category in the country. At year-end, the company had 1,252 owned and franchised bakery-cafes, and it plans to open 80 to 90 new stores in 2009.
"We like the pickup in revenue growth in the past quarter, and we especially like the improvement in the pro?t margin, a sign of capable management. The number of mutual funds that own the stock continues to grow, and is nearing 200.
"PNRA peaked at 76 back in early 2006, and then faded as growth slowed. It bottomed at 31 at the end of 2007. The stock recently broke out above its 2008 closing high of 56 in a powerful move, so that level now represents support. We think you can buy a little here."
