Cheesecake Factory Shares Rise

CAKE is a restaurant chain primarily operating the Cheesecake Factory and North Italia brands, along with others. The company has displayed strong demand and sales performance recently, including for new restaurants. Also, CAKE’s comparable sales and traffic of late surged past industry averages. The company has opened 17 of its planned 22 new locations this year. Next year, CAKE plans to add up to 24 new restaurants.

As for earnings, Cheesecake Factory’s latest report surpassed expectations, especially for per-share earnings. CAKE’s adjusted EPS was $0.58 versus an expected $0.47, and better than a year ago, when it posted EPS of $0.39. The company’s revenue has grown 4.3% over the past year, while its earnings growth stands at 49%. CAKE also declared a dividend of $0.27 per share.

It’s no wonder CAKE shares are up 35% this year – and they could rise more. MAPsignals data shows how Big Money investors are betting heavily on the forward picture of the stock.

Big Money Buying Cheesecake Factory

Institutional volumes reveal plenty. Recently, CAKE has enjoyed strong investor demand, which we believe to be institutional support.

Each green bar signals unusually large volumes in CAKE shares. They reflect our proprietary inflow signal, pushing the stock higher:

Plenty of discretionary names are under accumulation right now. But there’s a powerful fundamental story happening with Cheesecake Factory.

Cheesecake Factory Fundamental Analysis

Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, CAKE has had strong sales and earnings growth:

• 3-year sales growth rate (+21.5%)
• 3-year earnings growth rate (+63%)

Source: FactSet

Also, EPS is estimated to ramp higher this year by +11.5%.

Now it makes sense why the stock has been powering to new heights. CAKE has a track record of strong financial performance.

Marrying great fundamentals with our proprietary software has found some big winning stocks over the long term.

Cheesecake Factory has been a top-rated stock at MAPsignals. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

It’s made the rare Top 20 report multiple times in the last two years. The blue bars below show when CAKE was a top pick…driving value up:

Tracking unusual volumes reveals the power of money flows.

This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward.

Cheesecake Factory Price Prediction

The CAKE rally isn’t new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no position in CAKE at the time of publication.

If you are a Registered Investment Advisor (RIA) or are a serious investor, take your investing to the next level, learn more about the MAPsignals process here.