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Analysts lay out their top fast-food stock picks

Monday, 12 Aug 2013 | 1:20 PM ET
Frequenting of fast food falls
Monday, 12 Aug 2013 | 11:40 AM ET
Americans are going to fast-food restaurants less frequently, according to a new Gallup poll. Nicole Miller of Piper Jaffray and Rachael Rothman at Susquehanna Financial Group explore how this will affect sales and investors.

With fast food restaurants now offering such innovations as the waffle taco and the pretzel burger, should investors be impressed? Two pros on Monday told CNBC what they think.

"It's pretty tough" to make money in the restaurant space, Rachael Rothman, analyst of Susquehanna Financial Group, said on "Squawk on the Street". She said investors looking for exposure to the area should stay with large-scale companies such as McDonald's or firms in a broader consumer category. She also suggests looking to companies that are gaining traction on same store sales.

"There are definitely the haves and the have-nots," Rothman said.

(Related: What's cooking at fast-food restaurants)

However, in the group, fast food has been a bright spot compared to casual or full-service restaurants, said Nicole Miller, senior research analyst at Piper Jaffray. She predicts that the industry is in the second year of a five-to-seven-year expansion cycle, on both a multiple and earnings basis.

She suggests that investors look to market share takers in each individual restaurant category, such as Starbucks, Noodles & Co. and the Cheesecake Factory.

—By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul

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