3 Restaurant Stocks to Buy Now
NEW YORK (
) -- Restaurant stocks were a hot topic on Wall Street this week as private equity buyouts circulated -- and were then confirmed -- surrounding
Burger King Holdings
(BKC)
.
Sonic
(SONC)
,
Wendy's Arby's Group
(WEN) - Get Report
,
Jack in the Box
(JACK) - Get Report
,
California Pizza Kitchen
(CPKI)
and Chili's operator
Brinker International
(EAT) - Get Report
have also been tapped as potential restaurant stocks that may be targets for private-equity buyouts, helping to push their share prices higher in trading Thursday.
>>Burger King Agrees to Buyout
Burger King shares surged 25% to close at $23.58 on more than 42 times their average trading volume.
Stifel Nicolaus analyst Steve West told
TheStreet
now is the time to sell Burger King shares
, on the view that the stock is unlikely to rise much higher. Some arbitration shops may still make some money on the stock, potentially filing suits arguing for a higher-priced deal, but "I don't think any more upside will be material," he said.
>>Bankruptcy Watch: 20 Riskiest Restaurant Stocks
At this point it's a little too late in the game for investors to make much hay from Burger King shares. Instead, West tapped
Panera Bread
(PNRA)
as his top pick in the restaurant sector, followed by sector darling
Chipotle Mexican Grill
(CMG) - Get Report
, as stocks savvy investors should look to now.
West also had a buy rating on industry behemoth
McDonald's
(MCD) - Get Report
, arch rival to Burger King.
Hedge fund 3G will pay $24 in cash for each share of Burger King, a 45.9% premium to the Whopper-and-fries chain's closing price on Tuesday, before rumors of the buyout began circulating on Wall Street.
Restaurant stocks soared on Thursday, with Burger King clearly outpacing the sector.
>> Restaurant Winners: Burger King
DineEquity
(DIN) - Get Report
, operator of IHOP and Applebee's restaurants, closed up by 11.1% while Brinker added 9.1%.
Biglari Holdings
(BH) - Get Report
, a holding company that recently
more than doubled quarterly profits
thanks to a stronger performance at its Steak n Shake restaurants and to its acquisition of Western Sizzlin, jumped 7.1%.
-- Written by Miriam Marcus Reimer in New York.
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Miriam Reimer
.
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RELATED STORIES:
>> Burger King Agrees to Buyout
>> Restaurant Winners: Burger King
>> Sell Burger King Shares Now: Analyst
>> Bankruptcy Watch: 20 Riskiest Restaurant Stocks
>> Burger King Grilled by Analysts
>> Burger King Beats, Looks Abroad for Growth
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