NEW YORK (TheStreet) -- The bull market in restaurant stocks may finally be showing signs of fatigue.
The sector has been on fire for much of the past five years, with average annual returns during that period for the 40 or so restaurant stocks I track at above 40%. But with the average price-to-earnings ratio above 33, it may be time for a breather.
Year to date, the restaurant stocks I track are up an average of 1.3%, which still beats the S&P 500 (+0.85%), but is behind the Russell 2000 (+2.1%), which may be a more appropriate benchmark given the restaurants' average market capitalization.
Famous Dave's is up almost 40% year to date, and has surged recently on better-than-expected quarterly earnings and the announcement that Ed Rensi, former president of McDonald's USA, will be taking the helm as CEO.
The stock, which had been languishing in obscurity, now trades at an all-time high. Part of that obscurity is due to the company's relatively small market cap, which is just under $200 million. That's tiny considering the company's 194 locations (54 company-owned, 140 franchised).
Famous Dave's has also reduced shares outstanding by almost 30% since 2007 through buybacks, giving it a relatively small float.