Cheesecake Factory (CAKE) NewsBite - CAKE Down on Negative Darden Outlook

Tuesday, August 26, 2008 10:32 AM EDT

Cheesecake Factory (NasdaqNM: CAKE) opened at $15.39. So far today, the stock has hit a low of $14.64 and a high of $15.43. CAKE is now trading at $14.84, down $0.85 (-5.42%). The stock hit its 52-Week high of $25.36 in August and set its 52-Week low of $13.69 in July. Shares of restaurant operators have been tumbling today after Darden Restaurants Inc. (DRI) forecast fiscal first-quarter profit below analysts' estimates and trimmed its full-year guidance, citing a more challenging economic and consumer environment. Technical indicators for the stock are bearish and S&P gives CAKE a negative 2 STARS (out of 5) sell ranking. If you are looking for a hedged play on CAKE the stock seems like it could be a candidate for a January out-of-the-money bear-call credit spread above the 20 range. [ABR-Seven Summits Strategic Investments NewsBite]

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