Cheesecake Gets a Slice of Growth-Stock Action

People are lining up for more than just the salads at restaurant chain Cheesecake Factory.

The Calabasas-based company’s stock (ticker symbol: CAKE) soared $3.13 to a record $46 in heavy trading Tuesday, continuing a rally that has boosted the price nearly 50% since mid-March.

Dennis I. Forst, analyst at brokerage McDonald Investments in West Los Angeles, believes that Cheesecake is a beneficiary of many investors’ sudden aversion to highflying technology stocks.

The hunt for growth stocks now is focused in other sectors, he said. And at Cheesecake, “the fundamentals are great,” Forst said.

The firm on April 25 reported first-quarter sales up 28% to $96 million and earnings up 56% to 28 cents a share. Sales at stores open more than one year rose nearly 5%.

Cheesecake, which went public in 1992, now operates 34 restaurants nationwide, many of which typically boast long lines at lunch and dinner. The firm also owns a bakery that produces cheesecakes and other baked goods.

Cheesecake is expected to earn $1.31 a share this year and $1.62 in 2001. With the stock’s run-up, the share price is 28 times the 2001 estimate--not high by tech-stock standards, but not cheap for a restaurant chain.

“The business couldn’t be better, but the price reflects that,” said Forst, who rates the stock a “long-term buy.”