Cheesecake Factory: Consider Buying the Pullback

Cheesecake Factory (NASDAQ: CAKE), first discussed here on June 25, 2009, at a price of $16.30, has survived the restaurant sector's major consolidation period, and I obviously still like the business model at this stage.

Cheesecake's shares have recently dipped to $29, after accelerating to $34 in December, but investors who can tolerate the risk should view the pullback as an opportunity.

Cheesecake Factory's traffic should rise in 2011, and the 160-restaurant chain should generate revenue growth of 4% to 5% in 2011, after a 4% gain in 2010. The chain has succeeded because it has combined generally good-to-very-good menu items with fair prices in a casual dining setting that projects quality.

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