4-Star Stocks Poised to Pop: Denny's

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, restaurant operator Denny's (Nasdaq: DENN  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Denny's and see what CAPS investors are saying about the stock right now.

Denny's facts

Headquarters (founded)

Spartanburg, S.C. (1980)

Market Cap

$461.2 million

Industry

Restaurants

Trailing-12-Month Revenue

$518.3 million

Management

CEO John Miller (since 2011)
CFO F. Mark Wolfinger (since 2005)

Return on Equity (average, past 3 years)

22%

Cash/Debt

$21.0 million / $204.4 million

Competitors

Cracker Barrel Old Country Store
DineEquity
Waffle House

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 92% of the 450 members who have rated Denny's believe the stock will outperform the S&P 500 going forward.  

Just last month, one of those bulls, dreamjob, tapped Denny's as a rather tasty bargain opportunity:

[S]trong owner earnings with this company, and it appears to be well managed in the last couple of years (low flow ratio, high ROIC). The main characteristic of this company that is appealing right now is that it is dirt cheap. Even with very conservative earnings growth estimates (say 3% per year average for next 5 years), we are still below intrinsic value of this stock. Analysts are expecting 19% on average per year. I don't think that's going to happen; however, it does give us starting point for estimation.

If you want market-thumping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Denny's may not be your top choice.

We've found another retailer we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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