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Fast Money

Sector Trade - Fast Food


As you might remember us telling you, fast food is good for more than just a quick meal - it's also good for some fast money. And one of the companies serving up the biggest helping of profits is CKE Restaurants (CKR), home to Carl's Jr.’s and Hardee's. The company's shares are up 10% in the last six months But with competition for big burgers heating up, can they continue a good run?

Joining the guys on the fast line is CKE’s Chief Executive, Andy Puzder.

Dylan Ratigan asks if CKE will grow at the same rate as it has in the past 6 months.

Mr. Puzder answers that momentum is building and fast food is moving toward quality positioning, as well as competing with casual diners such as Applebees, Friday’s and Chili’s.

Dylan asks about the PR problem presented by studies that suggest fast food makes kids fat.

Mr. Puzder answers that CKR doesn’t market toward kids.

Jeff Macke asks Mr. Puzder what keeps him up at night.

He answers inflationary trends, but a weak economy can be good for his company – because he gets a trade down from the casual dining restaurants.  And in a strong economy he says customers trade up from McDonald’sto his restaurants. Historically, he adds a down economy helps fast food.

Dylan Ratigan asks about sexual marketing for fast food (the company has generated a steamy ad featuring Paris Hilton.)

Mr. Puzder responds that there is a point for crossing the line – but his company hasn’t crossed it yet.

Dylan asks about rising commodity prices.

Mr. Puzder says beef is the biggest issue.  When beef goes up – his costs go up – and right now beef is at historic lows.

After the interview ends, Eric Bolling says he likes McDonald’s (MCD) better (as an investment) because more revenue comes from outside the U.S.

Guy Adami adds CKR has Paris Hilton selling burgers and who is he to argue with that.

Tim Strazzini says he likes CKR more than Chipolte Mexican Grill (CMG) which he thinks is overvalued.

Jeff Macke says he likes the whole sector and thinks CKR’s stock will go higher.

Questions? Comments?

Trader disclosure:
On MAR 26, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders.Strazzini Owns (MER) Bolling Owns (BP), (XOM), Gold, Silver, Soybeans, is Short Corn