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Sure, when you stack

CKE Restaurants


up against virtually all of its fast food competitors, it will lose almost every time.

But according to Jim Cramer on his Friday "Mad Money" segment, all that downside means the restaurant chain has the most upside potential in the sector: the negatives that originally drove the company into the ditch, such as its overexposure in California, are, he says, about to turn positive.

Cramer predicts a turnaround in California, one of the hardest hit areas of the recession, and home to 68% of CKE's Carl's Jr. chains. And with low gas prices, falling commodity costs and easy comparisons, CKE should be able to beat expectations.

The company's operating margins of just 5.7% lag well behind its peers, like

Burger King


, with margins of 14.5%, or even

Jack in the Box

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, with 8.5% margins, but CKE's margins are, themselves, up from just 2.3% in 2003, Cramer said.

CKE also has significant room for growth and has the added benefit of a 3% dividend yield that pays shareholders to wait for better times ahead.

In April, the company's same-store sales dropped .5%, and starting next quarter the company will face easy comparisons.

Restaurants as a whole have been searching for ways to bring back consumers who have opted to save money by eating home. But unlike its competitors, such as

Yum Brands

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, CKE has refrained from offering deep discounts and promotional meals.

"While many of our competitors are capitulating to massive discounting practices, we are managing our business for the long term, offering select budget items, while maintaining our premium product positioning," CEO Andrew F. Puzder, said in its April same-store sales release.

Shares of the company closed down 4% to $7.73 on Friday. In other words: you can get a meal for $6 at a Carl's Jr., Cramer says, or for a few bucks more pick up a share of the stock.

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