This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Denny's: One Solid Comeback

NEW YORK ( TheStreet) -- Identifying troubled companies that are no longer taken seriously by Wall Street, and yet are quietly putting their houses in order, can be very rewarding. The rewards go beyond monetary; there is a certain sense of accomplishment that comes along with seeing promise in beaten-up names (promise that few other investors see), then experiencing the stock's rebirth.

There were few more-troubled names in the restaurant space then casual dining chain, Denny's (DENN - Get Report). After enjoying fairly wide popularity in the 1980s, with brand recognition driven by lots of advertising, the company's parent, Flagstar, filed for bankruptcy in 1997. When Denny's emerged as a standalone company from that bankruptcy, it did so with a lot of debt, and the ensuing years were difficult at best.

video platformvideo managementvideo solutionsvideo player

You just did not hear much about Denny's during that period, and I, for one, had all but forgotten that it was still around, let alone a publicly traded company. It took a memorable Super Bowl advertising campaign in 2009 to re-acquaint me with the company. In those ads, Denny's announced that it was giving away 2 million free breakfasts on the Tuesday following the Super Bowl, and all you had to do to take part was show up.

These expensive ads were ultimately used as ammunition against the company as a poor use of the advertising budget in a subsequent proxy fight by activist investors, but in my view, it was a great way to let the public know that Denny's was still open for business. In fact, the company offered a similar promotion the following year.

If nothing else, my rediscovery of Denny's via that first slick Super Bowl giveaway campaign, prompted me to take a look at the financials, which led to a profitable three-plus-year position in the stock.

Overall, the company has quietly delivered some good numbers over the past few years, remaining profitable during the last recession, and has also bolstered its balance sheet. Denny's has adopted a "re-franchising" strategy, selling company-owned stores, and using the proceeds to pay down debt.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DENN $9.76 1.35%
AAPL $118.03 -0.71%
FB $105.41 -0.31%
GOOG $748.15 -0.02%
TSLA $229.64 5.22%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs