Caribou Coffee and Denny's to Open Near 52-Week Highs

Caribou Coffee (NASDAQ: CBOU) and Denny's (NASDAQ: DENN) reached new 52-week highs of $15.51 and $4.37 per share, respectively, in Friday's trading session.

Caribou Coffee recently announced a partnership with a leading sales and marketing services company to assist with the expansion of its packaged coffee business. It also boosted its full-year guidance last week. The Minneapolis-based company operates more than 525 coffeehouses throughout the United States and sells coffee to grocery stores, mass merchandisers, office coffee providers, airlines, hotels and college campuses. Caribou Coffee has a market cap of $321 million.

Its long-term earnings per share growth forecast is 21.0% and its return on equity is 46.7%. The P/E ratio is 9.8 and the PEG ratio is 0.5. Shares are trading more than 53% higher than at the beginning of the year. In that time, the stock has outperformed competitor Starbucks (NASDAQ: SBUX) and the broader markets.

Denny's last week reported profit and revenue increases that broke a streak of four consecutive quarters of year-over-year profit and revenue drops. It attributed strong same-store sales to its marketing strategies. The company has an $403 million market cap and it operates a chain of of more than 1,650 company-owned and franchised family-style restaurants, primarily in North and Central America, Guam and New Zealand.

Denny's has a long-term EPS growth forecast of 19.0%. Its P/E ratio is lower than the industry average and its PEG ratio is 0.6. Year to date, shares are trading nearly 14% higher. In that time, the stock has outperformed competitors Bob Evans (NASDAQ: BOBE) and DineEquity (NYSE: DIN), as well as the broader markets.

Action Items:

Bullish: Traders interested in coffee-related exchange traded funds might want to consider the following trades:

• iPath Dow Jones-UBS Coffee Subindex Total Return ETN (NYSE: JO): up more than 34% in the past year
• PowerShares DB Agriculture Fund (NYSE: DBA): up more than 25% in the past year
• PowerShares Dynamic Food & Beverage Portfolio (NYSE: PBJ): up more than 20% in the past year

Bearish: Or traders might want to consider this alternative positions:

• Coffee Holdings (NASDAQ: JVA): up about 294% in the past year
• Starbucks (NASDAQ: SBUX): up nearly 47% in the past year

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