Schaeffer's Market Observation Features The Cheesecake Factory: CAKE.Business Editors CINCINNATI--(BUSINESS WIRE)--Feb. 3, 2004 Today's Market Observation From Schaeffer's Investment Research features The Cheesecake Factory (Nasdaq:CAKE). Market Observations are market-based reports that provide insight and analysis from a unique and unbiased perspective. These are published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/addinfo . A Taste of the Cheesecake Factory Ahead of Earnings The Cheesecake Factory (Nasdaq:CAKE) owns and operates about 60 upscale casual dining restaurants in 20 US states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . Tomorrow evening, the firm will report fourth-quarter earnings. Wall Street's consensus estimate stands at 30 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , four cents above year-ago figures. Moneycentral.msn.com data indicates that, over the past five quarters, CAKE has matched analysts' expectations on three occasions but fallen short of estimates on three occasions. CAKE shares have been in a gradual uptrend uptrend A series of price increases in a security or in the general market. Some investors believe a security tends to take on a certain inertia; as a result, these investors search for stock in an uptrend, thinking that it will probably continue to move in for the past 11 months, rising more than 50 percent from their February low around the 28 mark. The stock is currently consolidating into its ascending ascending /as·cend·ing/ (ah-send´ing) having an upward course. ascending progressing to higher levels, usually used in reference to the nervous system. 10-week moving average, which has helped provide support since August. CAKE is also perched near the 42-43 region, which defined a peak in the shares in April 2002. Click the following link to see the Weekly Chart of CAKE Since March 2002 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=9382 . The security has enjoyed long-term outperformance against the S&P 500 Index (SPX (Sequenced Packet EXchange) The transport layer protocol in the NetWare operating system. Similar to the TCP layer in TCP/IP, it ensures that the entire message arrives intact. SPX uses NetWare's IPX as its delivery mechanism. ). After more than three years within a solid uptrend, the stock's monthly relative-strength measure is currently drifting sideways drifting sideways the patient moves gradually to one side when attempting to walk in a straight line. and advancing toward its 10-month and 20-month moving averages. Click the following link to see the Monthly Relative Strength of CAKE Versus SPX Since January 2000 With 10-Month and 20-Month Moving Averages: http://www.schaeffersresearch.com/wire?ID=9382 . The number of shorted CAKE shares rose steadily from December 2002 through September 2003. There are currently 6.86 million CAKE shares sold short, which represents 17 percent of the public float and amounts to a short-interest ratio short-interest ratio A ratio that is used for market analysis and is calculated by dividing short interest by average daily volume. Technicians use the short-interest ratio as a tool to determine market direction. of almost 13 times the stock's average daily volume. The amount of shorted CAKE shares has declined slightly of late as bearish Bearish Words used to describe investor attitude. A bearish investor believes that a particular asset or the market as a whole will decline in value. bearish speculators slowly cover their positions. Click the following link to see the Shorted Shares Chart of CAKE Since December 2002: http://www.schaeffersresearch.com/wire?ID=9382 . Options players haven't taken much of an interest in CAKE, as evidenced by the fewer than 5,000 open contracts among the front three-months' options series (2,800 call and 1,300 puts). This ratio, however, has shown a decline in the ratio between call options and put options. Schaeffer's put/call open interest ratio (SOIR SOIR Schaeffer's Put/Call Open Interest Ratio SOIR Simultaneous Operations on Intersecting Runways ) for CAKE reached an annual high in October but has subsequently been spiraling lower to its current reading of 0.45, which is lower than 85 percent of the past year's worth of readings. The Wall Street community has also become slightly more optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op toward the shares and has also grown more interested in the shares, unlike the speculative crowd. Three months ago, Zacks reported that of the 12 analysts following CAKE, only five named it a "buy," leaving four "hold" ratings and three "sells." At the present juncture junc·ture n. The point, line, or surface of union of two parts. , 17 brokerage firms rate the stock, eight of whom list it as a "buy," six name it a "hold," and three continue to rank CAKE as an outright "sell." A surprising earnings report tomorrow (to the upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside or the downside) could have a result on these analyst rankings. The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. http://www.schaeffersresearch.com/addinfo. About Schaeffer's Investment Research (www.SchaeffersResearch.com) Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method . |
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