CNBC’s Jim Cramer said Latin-themed restaurants are hot, but other new concepts, not so much. With the bellyflop of Red Robin Burgers (RRGB) and Noodles (NDLS) after their disappointing earnings, many might be tempted to give up on the restaurant sector, but as Cramer explained on Mad Money, there are some concepts that are working. The Latin concept is popular, perhaps partly because the perception is that this food is fresher and healthier. Chipotle Mexican Grill (CMG) is by far the winner in the sector. It trades at a high stock price, and Cramer wouldn’t chase it. Jack in the Box (JACK) has its Qdoba restaurants which are a successful regional-to-national story. JACK also has an aggressive buyback to reward shareholders. Fiesta Restaurant Group (FRGI) has a quickly growing Caribbean theme and a slower growing Taco Cabana chain. El Pollo Loco (LOCO) shot out of the gate on its IPO, but Cramer wants to wait and see what management will say in its first earnings report before buying the stock.
On Thursday, there was a surprise bid for Omnivision (OVTI) from Hua Capital, and the stock rose 13.5%. While this is only a preliminary proposal, Cramer said the move caused investors to wonder if other possible targets like Micron (MU) and Skyworks (SWKS) weren’t undervalued. OVTI was not the strongest player in the sector by a long shot, had been missing numbers and getting downgrades, and good news for OVTI was great news for its peers.
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