5 Restaurant Stocks to Sink Your Teeth Into

Restaurant Stock #5 – Ruth’s Chris Steakhouse (RUTH)

I don’t consider Ruth’s Chris Steakhouse (RUTH) to be an upscale, hoity-toity sort of restaurant.
Although Ruth’s provides a great atmosphere and wonderful food and service, the company struggled during the economic boom when upstart fancy steakhouses
offered stiff competition.

Matters got worse for the company during the credit crisis, as the company carries a fair amount of debt on its balance sheet. The combination of
fewer customers and debt load pushed shares of RUTH to bankruptcy levels.

Shares bottomed in March at around a buck a share. A recovery in credit markets and a planned capital raise eased bankruptcy concerns. Coming off
a fourth-quarter loss of more than $60 million, investors were right to be concerned.

Today, the landscape has changed, and much of Ruth’s competition is going by the wayside. With shares at $3.50, Ruth’s valuation is quite low. I
expect growth to return, as the company benefits from less competition and a stronger economy.

I would buy shares here, and I rate RUTH a B or buy.

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