This Day On The Street
Continue to site
ADVERTISEMENT
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

Restaurant Stocks: A Year in Review

NEW YORK ( TheStreet) - With all of the talk about China and the toll its economy have had on the likes of Yum! Brands (YUM - Get Report) and McDonald's (MCD), it would surprise many to know the restaurant industry, which posted 27% gains in 2013, was actually one of the better performers in the market.

I believe this was one of those years where fear screwed up the Street's expectations into thinking that things were much worse than they actually are.

With gains of (only) 10% on the year, I have to say that Yum! Brands exceeded all expectations. I say this knowing that when compared to Wendy's (WEN) 81% gains, Yum! was a laggard. But you also have to remember the deficits Yum! was working with, many of which had analysts proclaiming at the end of 2012 that Yum! was "cooked."

I do realize that Yum! entered 2013 with a couple of public relations gaffes, including a scandal in China involving two suppliers to its KFC restaurants that allegedly provided chicken contaminated with antibiotics. Then there was also the threat of avian flu in its chicken supply that scared off customers.

To that end, on more than one occasion this year I've felt it was my "duty" to come to the company's defense. No, it's not because I owned the stock but because I've never left any of Yum!'s restaurants unsatisfied. Even so, given that China accounts for more than 50% of Yum!'s total revenue and 40% of its profits, these issues proved to be a bit tough to overcome.

As bad as things were for Yum! in 2013, the company still exceeded its 2012 gains by 4%. When you consider the company's three-year average stands at 14% gains, it does underscore the degree to which the Street can magnify certain situations. But I do expect 2014 will be a better year for the company.

This year also proved how much investors loved their pizza, wings and doughnuts -- all made a huge comeback. With Domino's Pizza (DPZ), Buffalo Wild Wings (BWLD) and Krispy Kreme (KKD) posting gains of 61%, 95% and 98%, respectively, it seems that 2013's health craze with organic and natural foods were offset by some fun eating.

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CMG $721.20 0.00%
PNRA $180.56 0.00%
YUM $81.82 0.00%
AAPL $113.29 0.00%
FB $91.01 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs