Investopedia: Middleby Keeps Sticking To A Successful Recipe

Remaining faithful to a value-oriented philosophy sometimes leaves you feeling like you're rooting for certain companies to stumble. Take the case of Middleby (Nasdaq:MIDD). While acquisitions have clearly played a major role in building the company, management has done pretty well in sustaining that growth on an organic basis and developing new equipment to improve the efficiency and profitability of restaurants. Unfortunately, as a very good growth stock, these shares seldom get to a valuation where value or GARP investors can feel comfortable loading up.

With another quarter in the books, Middleby continues to grow at a rate well above its peers and the industry as a whole. What's more, with the restaurant industry apparently feeling more comfortable about near-term trends, it doesn't sound like a stumble in demand is coming. Nevertheless, Middleby is a good stock to keep on watchlists just in case, and more growth-oriented (and less valuation-sensitive) investors may find there's nothing wrong with buying in today.

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Investopedia: Sysco Can't Fight A Low Tide

Without going a little too far with the nautical analogies, Sysco (NYSE:SYY) continues to look like a very tight ship, but one that can't change the tides. With established restaurants such as McDonald's (NYSE:MCD) and growth chains like Chipotle (NYSE:CMG) all seeing weaker traffic, there's not a lot that Sysco can do to goose organic volume growth. Although Sysco's margins softened a bit this quarter, this remains a top-notch company for the long-term, albeit one that is not especially cheap.

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Investopedia: Improved Traffic And Menu Revamp Optimism Boosting Darden

Sit-down restaurants have come back into favor over the past year or so, and Darden (NYSE:DRI) has gone along for the ride ... even though company growth really hasn't improved all that much. Darden remains a strong player in the industry, with two of the largest concepts (Olive Garden and Red Lobster) and sustained double-digit returns on capital. Although Darden shares don't look like much of a bargain today, the market may not be through with it yet, as menu revamps could spur better traffic and earnings.

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Investopedia: Sysco Humming Along

Food distributor Sysco (NYSE:SYY) is never flashy, but the company has an enviable track record of market share growth and consistent free cash flow growth. That makes it a staple name on lists of quality dividend growth stocks and conservative growth ideas. What's more, it is not a bad way to play what could prove to be many years of inflation pressure. (To help you build a dividend portfolio, read Build A Dividend Portfolio That Grows With You.)


Solid Third Quarter Performance
Sysco reported sales growth of just over 9% for its fiscal third quarter, quite a bit better than the consensus expectation of just under 6%. Growth was clearly fueled by food inflation of more than 5%; case volume growth was about 2% and real sales growth was just under 3%. That is relatively consistent with the customer traffic patterns being reported by major U.S. restaurant chains like McDonald's (NYSE:MCD) and Brinker (NYSE:EAT), so there is not much reason to think that Sysco is losing share.

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Middleby Stuck In The Middle For Now

It is tough for a company to make a lot of progress while its customers are struggling to get their own businesses moving again. So even though Middleby (Nasdaq:MIDD) seems to have very solid long-term growth prospects, it is hard to see how business really gets moving until the likes of P.F. Chang (Nasdaq:PFCB), Cheesecake Factory (Nasdaq:CAKE) and Brinker's (NYSE:EAT) see a recovery in traffic going through their doors. 

Still, patient investors can use this opportunity to get themselves up to speed on this restaurant equipment company. In the meantime, current shareholders do not seem to have any real reason to worry about the long-term story. 


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