With the Dow reaching 12,000, its worst levels since the Japanese disaster in March and six straight weeks of losses many investors are fearing a double dip. There’s been an observed increase in bond buying with September expirations, a protective portfolio move in the event the economy begins to free fall. With the European debt crisis and banks domestic and abroad suffering major losses, a lot of investors are smelling a second recession. As any wise investor is willing to tell you, there are opportunities to make money in any market. Among the areas that gain in profitability during these times are inexpensive food franchises. Panera, Chipotle and Wild Wings were all built during the last recession and could rise to new highs should the market fall out from under itself.
Panera Bread Company (Panera) is a national bakery-cafe company that operated under the names Panera Bread, Saint Louis Bread Co., and Paradise Bakery & Cafe. Panera operates in three business segments: Company bakery-cafe operations, franchise operations, and fresh dough and other product operations. The company is currently trading considerably beneath it’s 52-week high, which peaked in March alongside the market losses. Right now it has a P/E ratio or 30.9x, revenue of 1.6B and a return on equity of 18.69 percent.
Chipotle Mexican Grill, Inc. operates restaurants across the United States and in Toronto as well as one in London, totaling 1,084. The quality of their food is generally considered to exceed that of its competitors like Taco Bell and Qdoba, making it a leader in its field. Shares have corresponded to the public’s enthusiasm for the companies tacos, burritos and other offerings making it among the highest earning companies in its field. Share prices; however, are consistent and remain near their current 52-week highs. While they could reach new highs should another recession boost sales of their low priced cuisine, a Chipotle investment is considerably more expensive and potentially risky than one in Panera.
Buffalo Wild Wings (BWLD)
Buffalo Wild Wings, Inc. is an owner, operator and franchisor of restaurants featuring a variety of menu items, including its Buffalo, New York-style chicken wings. Shares of the company are up more than 50 percent so far this year and could continue to grow in a recession. In spite of the growth the company still maintain a P/E ratio of around 25, impressive considering the rocketing share prices. Earnings per share stand at $2.33 with revenue of$643.1, profit margin6.64 percent and a return on equity17.27 percent.