In this article, we discuss 5 best fast food stocks to buy now. If you want to read about some more fast food stocks, go directly to 11 Best Fast Food Stocks to Buy Now.
5. Domino’s Pizza, Inc. (NYSE:DPZ)
Number of Hedge Fund Holders: 32
Domino’s Pizza, Inc. (NYSE:DPZ) operates as a pizza company in the United States and internationally. It is one of the best fast food stocks to invest in. On October 18, Domino’s Pizza stated that it is launching its first fully women operated store in Bangladesh. This is the 12th store in Bangladesh.
On October 14, BMO Capital analyst Andrew Strelzik maintained an Outperform rating on Domino’s Pizza, Inc. (NYSE:DPZ) stock and lowered the price target to $400 from $430, noting that softer margins and higher taxes had led the company’s Q3 earnings to miss the targets.
At the end of the second quarter of 2022, 32 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in Domino’s Pizza, Inc. (NYSE:DPZ), compared to 27 in the previous quarter worth $1.8 billion.
In its Q2 2022 investor letter, Pershing Square Holdings, an asset management firm, highlighted a few stocks and Domino’s Pizza, Inc. (NYSE:DPZ) was one of them. Here is what the fund said:
“Since our last update, Domino’s Pizza, Inc. (NYSE:DPZ)’s near-term business performance has shown meaningful improvement, including three-year stacked growth for the second quarter of 17% in the U.S., up 560 basis points sequentially. This improvement was driven by the full impact of its recent pricing actions, operational changes leading to improved staffing and labor utilization, and the return of its signature Boost Week promotion. These positive developments caused a significant recovery in Domino’s share price and its valuation increased to more than 28 times our estimate of next twelve months’ earnings. In light of the company’s relatively high valuation in the context of a volatile market environment, we decided to exit our investment to raise cash for alternative investment opportunities. We have enormous respect for Domino’s and its management team led by Russell Weiner, and we expect the company to continue its long track record of success.”
4. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders: 39
Chipotle Mexican Grill, Inc. (NYSE:CMG) owns and operates Chipotle Mexican Grill restaurants. It is one of the top fast food stocks to invest in. On October 19, Chipotle Mexican Grill announced that it will come to Madison by next summer after a number of requests from customers.
On October 4, Deutsche Bank analyst Brian Mullan maintained a Hold rating on Chipotle Mexican Grill, Inc. (NYSE:CMG) stock and raised the price target to $1,708 from $1,503, highlighting that company expects to meet Q4 consensus same-store sales estimate of 8.5%.
At the end of the second quarter of 2022, 39 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in Chipotle Mexican Grill, Inc. (NYSE:CMG), compared to 38 in the preceding quarter worth $2.95 billion.
In its Q1 2022 investor letter, Ensemble Capital, an asset management firm, highlighted a few stocks and Chipotle Mexican Grill, Inc. (NYSE:CMG) was one of them. Here is what the fund said:
“Chipotle Mexican Grill, Inc. (NYSE:CMG) (6.0% weight in the Fund): In a recent blog post called GREAT COMPANIES ARE FORGED DURING CRISIS we discussed why companies with economic moats, relevant products and services, and those that create stakeholder value are more resilient in the face of crisis than the average company. Less advantaged competitors, in turn, struggle, which creates opportunities for great companies to get even better.
We think Chipotle navigated the COVID environment better than any major quick-serve restaurant and has consequently gone from strength to strength. Indeed, from March 1, 2020 to March 31, 2022, Chipotle shares gained 106% versus the S&P 500 Restaurants Index’s 28% return, including dividends (…read more)
3. Yum! Brands, Inc. (NYSE:YUM)
Number of Hedge Fund Holders: 40
Yum! Brands, Inc. (NYSE:YUM) develops, operates, and franchises quick service restaurants worldwide. It is one of the premier fast food stocks to invest in. On October 18, Pizza Hut, a chain of Yum Brands, revealed that it is launching a new menu category, Pizza Hut Melts. Pizza Hut Melts will be priced $6.99 at participating restaurants. On September 21, Taco Bell, a chain of Yum Brands, disclosed its partnership plan with Beyond Meat to launch Beyond Carne Asada Steak product.
On October 19, Cowen analyst Andrew Charles maintained an Outperform rating on Yum! Brands, Inc. (NYSE:YUM) stock and lowered the price target to $130 from $143, highlighting that the company was expecting a strong Q3 exit to sustain in Q4.
2. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 50
McDonald’s Corporation (NYSE:MCD) operates and franchises McDonald’s restaurants in the world. It is one of the elite fast food stocks to invest in. On October 19, McDonald’s recently released limited edition adult Happy Meal toys that were sold on the secondary markets for as much as $300,000. The sellers listed a total of 3 unopened toys. On October 19, McDonald’s stated that it is partnering with Krispy Kreme Donuts to offer Krispy’s donuts at nine locations.
On October 19, Credit Suisse analyst Lauren Silberman maintained an Outperform rating on McDonald’s Corporation (NYSE:MCD) stock and lowered the price target to $272 from $287, highlighting that the company’s strength continued in Q3 and overall sentiment remains positive broadly.
At the end of the second quarter of 2022, 50 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in McDonald’s Corporation (NYSE:MCD), compared to 58 in the previous quarter worth $2.7 billion.
1. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 55
Starbucks Corporation (NASDAQ:SBUX) operates as a roaster, marketer, and retailer of specialty coffee worldwide. It is one of the major fast food stocks to invest in. On October 19, Starbucks announced that it is planning to sell Seattle’s Best Coffee brand to Nestle. This sale will further strengthen the Global Coffee Alliance by allowing both companies to focus on their core strengths. The financial terms of the deal were not disclosed.
On September 22, Stephens analyst Joshua Long initiated coverage of Starbucks Corporation (NASDAQ:SBUX) stock with an Equal Weight rating and a $91 price target, noting that in the long-run, the firm’s brand strength, rewards program, and coffee consumption secular tailwind position the company for growth.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Starbucks Corporation (NASDAQ:SBUX), with 5.8 million shares worth more than $444.7 million.
In its Q2 2022 investor letter, Matrix Asset Advisors, an asset management firm, highlighted a few stocks and Starbucks Corporation (NASDAQ:SBUX) was one of them. Here is what the fund said:
“Starbucks Corporation (NASDAQ:SBUX) is a premiere global coffee brand supported by over 32,600 stores across the world. The firm has a long history of beverage innovation and strong employee/barista relations with the firm paying above-market wages and benefits. Starbucks has a strong balance sheet and finances. The company generates steady and consistent cash flow, selling millions of cups of premium coffee every day. The company’s share price declined in part due to its large business in China which was largely shut down due to Covid restrictions and because of rising commodity and labor costs. We think the shares are attractively priced for a company that should grow 10% plus per year with a dividend yield of 2.6% at our average cost.”
You can also take a peek at 10 Best Guru Stocks To Buy Now and Top 10 Health Insurance Stocks to Buy.
