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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?


To: richardred who wrote (2402)9/18/2010 7:38:09 PM
From: richardred  Respond to of 7256
 
Analysts Target Restaurant Stocks With Buyout Speculation
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the tickerspy.com Staff, On Tuesday September 14, 2010, 1:52 pm EDT

Earlier this month Reuters suggested that Burger King Holdings's (NYSE: BKC - News) $3.26 billion buyout by 3G Capital could precede a "flurry of restaurant deals" as private equity firms look to spend cash pent up since before the credit crunch. Steve West at Stifel Nicolaus told Reuters Papa John's International (NASDAQ: PZZA - News), Jack In The Box (NASDAQ: JACK - News), and Sonic (NASDAQ: SONC - News) were potential candidates, and Telsey Advisory Group analyst Tom Forte sees Brinker International (NYSE: EAT - News) and Ruby Tuesday (NYSE: RT - News) as potential targets.

As a whole, the Restaurant Stocks Index is outperforming the S&P 500 by 7% over the last month, and more than half of its 47 components have gained 10% or more for the period.

This morning Deutsche Bank offered its picks for restaurant M&A speculation. The firm sees Ruth's Hospitality (NASDAQ: RUTH - News), Buffalo Wild Wings (NASDAQ: BWLD - News), Texas Roadhouse (NASDAQ: TXRH - News), and Wendy's Arby's Group (NYSE: WEN - News) as the most attractive buyout candidates, and suggests that investors place bets on a basket of stocks rather than attempting to isolate a single buyout target.

It will be interesting to see whether more merger activity is ahead in the restaurant space, and where the sector's stocks go from here. Investors can track the Restaurant Stocks Index for performance trends and a suite of other metrics at tickerspy.com.

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finance.yahoo.com