The Cheesecake Factory, Inc. (CAKE)

OK folks, we have a value investor’s winner here!!! Look at its price chart over the past ten years and you can see that it, on average, has outpaced both the Dow and the S&P. This is in the face of an early decade recession and the current Depression 2. How does a quirky restaurant like CAKE generate its' net income? Let’s take a closer look at some of its' internal workings. First debt...worst case scenario it would pay out a little less than .50 on the dollar if it went heads up. Since it hasn't increased outstanding shares over the past ten years, seems to indicate good management. Its debt/equity ratio is .29 versus S&P's ratio of $1.11. So we can easily see CAKE isn't using debt to aggressively generate revenue. Many other positive indicators but lets move on. Its current P/E of 22.87 is lower than its ten year average of 27.5. Its depreciation and amortization is about 22% of its gross profits over the past five years which again shows smart management. Its gross profit margin has been about 20% over the past ten years, not great but definitely worth the risk. Now value investors, listen up. I calculate based on CAKE's last ten years of share holder's equity and current price that it is greatly undervalued. As a rough rule of thumb, I would say that it is going for 23% of what the current price should be for a 20% return over the next ten years. I can go on but I don't want to get one of those charms that show lengthily pitches. After I max out Hersey's, I am definitely turning to CAKE.