By Michael Cintolo, Vice President of Investments and Editor of Cabot Market Letter and Cabot Top Ten Report
From Cabot Wealth Advisory, 2/4/10. Sign up for free Cabot Wealth Advisory e-newsletter
Today I'll highlight a stock I've been keen on for a while, yet the stock (and its group) just never got going last year. But now, it looks like the tide may be turning.
I'm talking about restaurant stocks, but specifically, "new idea" restaurant stocks that aren't already so big that they're destined to grow a measly 5% a year. One of my favorite ideas in the group, Buffalo Wild Wings' (BWLD), has tons of expansion potential in the years ahead, which, combined with growth at restaurants already open, should drive earnings sharply higher.
Buffalo Wild Wings' is aiming to be a national sports bar of sorts, a novel idea. The firm makes a lot of its money on alcohol, thanks to its fun, cozy atmosphere, yummy wings (including a dozen different sauces) and crew that is told not to force customers out the door. The firm currently has 652 stores in 42 states, but management believes 1,000 stores in the U.S. is easily achievable, followed by expansion overseas. Revenue growth is running in the 25%-plus range, with earnings a little faster.
The stock has been building a base since the middle of last year but perked up in 2010 despite the soggy market. Also, the company reports earnings on February 11. Assuming the stock get through the earnings reports unscathed, my thought is that it has strong upside in the months ahead as money flows into the fastest-growing companies in this group.
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♦ For the past 10 years, Cabot dominated the market by a staggering 113%! (Market was down 26%.)
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Michael Cintolo Vice President of Investments and Editor of
Cabot Market Letter and
Cabot Top Ten Weekly
A growth stock and market timing expert, Michael Cintolo is editor of Cabot Market Letter and Cabot Top Ten Weekly. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Perhaps most notable was his development of the proprietary trend-following market timing system, Cabot Tides that has helped Cabot place among the top handful of market-timing newsletters numerous times.