Luby's Cafeterias" 'Good food from good people' is more...

STOCK WATCH

May 15, 1991|By Opinions on stocks offered by investment experts. Compiled by Steve Halpern for Knight Ridder.

Luby's Cafeterias

" 'Good food from good people' is more than a company slogan for Luby's cafeterias (LUB, NYSE, around $18); it is a customer-oriented philosophy that accounts for much of the firm's success," says Geraldine Weiss of Investment Quality Trends, La Jolla, Calif.

"The firm operates 144 family-style cafeterias in the South. The firm's finances are a tasty treat . . . With an excellent management team, a strong growth rate, and a nearly debt-free balance sheet, we believe the company has an exciting future."

Pepsico

"PepsiCo (PEP, NYSE, around $31), which is well-known for its soft drink operations, also operates three restaurant chains Kentucky Fried Chicken, Pizza Hut, and Taco Bell," says Dow Theory Forecasts, Hammond, Ind. "The company plans to spend $1.5 billion on expansion during 1991, up 25 percent from last year's spending level." The largest portion will go toward the restaurant division, which "has accounted for much of the company's growth in recent quarters. The stock may be purchased below the $33 level."

Grand Metropolitan

"Grand Metropolitan (GRM, NYSE, around $28) is a British-based conglomerate. The company represents a worldwide collection of food, beverage, and retail operations," says United & Babson Investment Report of Wellesley, Mass.

"Its retail side is anchored by the Burger King chain. Under its umbrella are some of the world's best-known brand names including Smirnoff and Pillsbury. The company faces an abundance of opportunities to expand. We recommend purchase of the stock for long-term growth."

Perkins' Restaurants

"Perkins (PFR, NYSE, around $15) operates and franchises 400 full-service family-oriented restaurants in 28 states," says The Tennessee Investor of Nashville, Tenn.

"Perkins offers high quality food and moderate prices. The company is set up as a limited partnership. Profits are estimated to reach $1.48 a share in 1991, with cash flow of $2.40 per share. We expect the company's generous $1.20 per share payout to be increased this year. Purchase of this stock is strongly recommended for both growth and income investors."

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