Hilary Kramer's Daily Picks & Pans

Friday, June 1, 2007 Guest blogger: Larry Schutts, vice president of Stockwinners.com and a contributing editor for Theflyonthewall.com. Larry looks for stocks with technical and fundamental characteristics indicating gains in the next 30 days. However, price movements may be volatile. He includes a stop-loss price in each post. Consider selling a position should the stop-loss be violated.

Some folks say that a hamburger is just a hamburger, but that's just not right. There is an outfit in Greenwood Village, Colorado that makes them so big you need to back up and get a running start.

Red Robin Gourmet Burgers (NASDAQ:RRGB) is a casual dining restaurant chain, known for its menu of more than twenty gourmet burgers in a variety of recipes. There are more than 360 Red Robin restaurants across the United States and Canada. The company operates about 60% of the locations and franchises the rest. Major competitors include Burger King Holdings, Inc. (NYSE:BKC), McDonald's (NYSE:MCD) and Wendy's International (NYSE:WEN). 

The firm pleased shareholders last week, when it reported Q1 EPS of 44 cents and revenues of $212.3 million. Analysts had been expecting 42 cents and $211.6 million. Management also offered essentially in-line guidance for FY07 results. RRGB shares popped through 200-day, 50-day and 30-day moving average resistance on the news and then began to define a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with five "strong buys," two "buys" and seven "holds." Analysts see a 20% average annual growth rate through the next five years. The stock's Price to Sales ratio (1.08), Price to Book ratio (2.81), Price to Cash Flow ratio (10.73) and Sales Growth rate (24.52%) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks it has traded between $32.42 to $50.85. A stop-loss of $37.25 looks good here.

hilaryonstocks at 7:16:00 PM EDT Blog about this entry |  Add to del.icio.us |  digg this

This entry has 1 comments: (Add your own)

• #1 Comment from yanakee97 
  6/7/07 5:18 PM | Permalink

  Ya gotta love a pennant.