“While restaurant food on balance is far less nutritious than home-cooked meals, Americans now spend half their food money eating out while consuming more than twice as many calories at restaurants than at home. ... For investors, we looked for food companies with the potential to maintain rapid growth and chalk up stock gains by virtue of offering consumers a compelling mix of decent nutrition and sufficient calories at a reasonable price. Of the restaurant chains meeting these standards and having a nationwide presence, [one standout is] Panera Bread Co. (PNRA Nasdaq). Panera Bread gets the highest nutritional grade from Health magazine. Its more than 1,600 stores in 44 states and Ontario offer fresh store-baked breads and a wide selection of salads and sandwiches. About half its bakeries and cafes are franchises, while half are company-owned. The balance sheet is debt-free, with free cash flow plentiful. Earnings growth over the past five years has averaged 20% a year, and with the company still relatively small, this pace should be maintainable for the foreseeable future. With a PEG ratio slightly above 1, the stock seems primed to outperform the market.”
Stephen Leeb, PhD., The Complete Investor, www.completeinvestor.com, 866-833-2070, June 2013
