3 Reasons To Consider The Cheesecake Factory
By Sammy Pollack:Shares of restaurant operator The Cheesecake Factory (CAKE) are up over 8% so far in 2012. However, there are three reasons why CAKE can continue to rally.
(Click to enlarge)
CAKE data by YCharts
Short Interest
Short interest in CAKE currently stands at 8.06 million shares, or 16% of the float. This significant short interest represents the possibility for a squeeze higher as CAKE continues to rally. The high short interest should also serve to magnify any rally coming from positive news. Short sellers are likely already starting to feel pressure to cover. As some short sellers begin to cover, it will only cause more pain for other short sellers.
Decrease In Gas Prices
As shown by the chart below, gasoline prices have plunged in recent weeks. This is bullish for CAKE as consumers will have more spending money and thus be more likely to eat out.
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