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Special Situations
CAKE: Cheap Valuation with Potential Activist Catalyst, MP Entry
The Cheesecake Factory, Inc. (CAKE), the upscale dining chain known for its large menu and strong brand value, is an interesting situation the market loves yet continues to underperform peers. However, with the recent addition to its Board of Directors of a sell-side restaurant research analyst, we believe activism is beginning to influence the company. JANA Partners has also been exploring the sale of peer Bloomin' Brands, Inc. (BLMN). On our valuation and potential activism, it's a good time to enter CAKE.

  • Strong Brand Value, Competitive Positioning, Acquisition-Led Growth - and Still Underperforming Peers
  • CAKE is an Opportunity for Strategic Investors to Help Implement Operational Fixes for Long-Term Value Creation
  • Higher FCF Conversion Than Peers Warrants Re-Rating / CAKE's Peers have Benefited from Franchising
  • Activism Campaign at Darden Restaurants Unleashed Value / Further Improvements Detailed In Analysis
  • CAKE Enters the Special Situations Model Portfolio with a +3% Weighting at the End of Today's (March 5) VWAP
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