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3 restaurant stocks to watch ahead of earnings

With big restaurant earnings about to kick off, CNBC "Fast Money" traders saw a clear winner — embattled giant McDonald's.

Yum Brands reports quarterly results Tuesday, with McDonald's posting financials later this month. Trader Steve Grasso said McDonald's looks appealing as it continues restructuring efforts.

"I think McDonald's had its turnaround moment. I think you're still safe there," he said Monday.

A McDonald's Egg McMuffin and hash browns are displayed at a McDonald's restaurant in Fairfield, Calif.
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A McDonald's Egg McMuffin and hash browns are displayed at a McDonald's restaurant in Fairfield, Calif.

The stock has climbed about 8 percent this year, ending Monday at about $101 per share. Trader Tim Seymour — whose firm Triogem Asset Management owns McDonald's shares — called it a "turnaround story."

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Trader Karen Finerman added that she would prefer McDonald's to burger competitor Shake Shack, which she and Seymour called overvalued.

Seymour also sees upside for KFC and Pizza Hut owner Yum. He said that the chain could easily top Wall Street's same-store sales estimates when it reports this week.

Disclosures:

Tim Seymour

Tim Seymour is long AAPL, BAC, CLF, DIS, F, FCX, GE, GM, GOOGL, INTC, JPM, KO, LGF, T, TWTR, Tim's firm is long BABA, BIDU, MCD, NKE, NOK, SBUX, YHOO.

Steve Grasso

Steve is Long AAPL, BA, BAC, CC, DD, DIS, DECK, EVGN, FIT, KBH, MJNA, MU, PFE, PHM, STRP, T, TWTR, GDX firm is long BP, COP, CVX, FCX, NE, NEM, OXY, RIG, AMZN kids own EFA, EFG, EWJ, IJR, SPY

Karen Finerman

Karen is long BAC, C, FINL, FL, GOOG, GOOGL, JPM, KORS, KORS call spreads, M, URI, she is short SPY, Her firm is long ANTM, AAPL, BAC, C, DIS, FINL, FL, GOOG, GOOGL, GPS, JPM, KORS, KORS call spreads, M, M calls, SUNE, SUNE call spreads, URI, URI long puts, M call spreads, her firm is short IWM, SPY, MDY, USO, Karen Finerman is on the board of GrafTech International.

Guy Adami

Guy Adami is long CELG, EXAS, INTC, Guy Adami's wife, Linda Snow, works at Merck.