Fair's fair. But when the market treats a stock unfairly, you load up on cheap shares.

Since October 2006, Buffalo Wild Wings (Nasdaq: BWLD) has hammered home its operating goals: 15% annual unit growth in 2007, 20% sales growth, and 25% earnings growth. The numbers are in for 2007, and the Buffalo came through on each of these promises.

There are now 493 Wild Wings restaurants scattered across the country, 15% on the nose more than at the end of 2006. Year-over-year revenues for the fiscal year improved by 21.3% after adjusting last year's results for an extra week of sales. Earnings per share took a 30% flying leap on the same basis.

It's not all wine and roses, as the company just barely managed to squeeze by the full-year targets after markedly slower results in the fourth quarter. Still, the report was good enough to reclaim over 9% of the recent stock price drop in a flash.

The whole casual-dining sector has not been treated kindly by the stock market since the "r" word warnings started in earnest last summer, and B-Dub is no exception:

Return Since 6/14/2007

CAPS Rating

BJ's Restaurants (Nasdaq: BJRI)



Texas Roadhouse (Nasdaq: TXRH)



The Cheesecake Factory (Nasdaq: CAKE)



Darden Restaurants (NYSE: DRI)



California Pizza Kitchen (Nasdaq: CPKI)



Buffalo Wild Wings



Ruby Tuesday (NYSE: RT)



Data from Yahoo! Finance and Motley Fool CAPS.

Despite fulfilling some ambitious growth goals and reaffirming them for another year of supposedly tough macroeconomic times, B-Dub's stock has been falling. In fact, none of these stocks have beaten the S&P 500's 12% decline over that period.

This stock does not get the love it deserves. To reach a 1.0 forward PEG ratio, assuming that B-Dub just meets its growth targets for the next few years, you'd need a $610 million market cap or about $35 per share. That's a 25% discount to fair value by my reckoning. So back up the truck. The market must come to its senses someday, once the Streetwide pessimism abates.

Fair is, after all, fair.

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