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What's Driving The S&P: Our Appetites

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The S&P continues to hover near record highs. One reason the markets are moving upward - our appetites!

Shares of CKE Restaurants (CKR), parent of Hardee's and Carl's Jr. jumped an impressive 110% in the last five years, and they’re up 13% this year alone.

CKE Restaurants Chief Executive Andrew Puzder joins the guys to help explain the trend.

How are you enduring the gas price hit and price increases in commodities?

“So far so good,” replies Puzder. “Gas prices are affecting consumer purchasing habits… but even when the economy is bad, people still have to eat. And when you think of fast food it’s a place where you can get a good meal not only quickly but economically. So even when the economy slows down we still do pretty well. But we’re not seeing the same level of positive same store sales like last year.”

What is the slowing rate of growth?

“Last year was a good year for both brands,” Puzder says. Both up 5% over the prior year. This year Carl Jr.’s is close to flat and Hardee’s is up 1% - 2% over last year. It’s a much slower rate of growth.

Burger King has done well because they’re appealing to enthusiasts. How about you?

Burger King (BKC) has size on it’s side,” replies Puzder. “But they’re not using the same quality beef or cooking systems so you don’t get as good a product. We compete on quality and innovation…. If you want to see what Burger King is selling in 6 months go see what Carl’s and Hardee’s is selling today. McDoanld’s (MCD) is doing the angus burger, 4 years after us!”

Puzder also says “We use only choice and select cuts. A lot of competitors… use cuts that are below choice and select (from overseas). It really is a better beef.”

What’s wrong with imported beef?

“I would prefer to USDA inspected beef… because other brands have gotten into trouble using foreign beef.

Dylan Ratigan asks the guys what they think of this stock?

Eric Bolling says beef prices are moving higher and he doesn’t like this stock.

Pete Najarian says he loves eating in these restaurants but doesn’t say if the stock is a buy.

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Trader disclosure: On May 23, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Najarian Owns (JPM), (BIIB), (FITB), (OVTI); Bolling Owns (DIS) Gold, Silver, Coffee, Sugar; Bolling Is Short (FXI); CNBC Is A Service Of NBC Universal And Dow Jones