This Week in Food and Restaurants
by Aristotle Munarriz (MF Edible)

Miami, FL (Apr. 11, 1997) -- Psst! Hey, nudge, nudge, wink, wink. You want to buy some naked pictures of my strife? Yes, I said strife. My pain on display, now for a limited time. Tracking one of the worst perfoming sectors over the last year has been brutal unless you were flipping restaurant stocks over on the short side. Between a casual dining segment that is overstored, to a fast-food niche knee-deep in yet another price war, investors have been quick to run away despite respectable earnings. As proud as I have been to steer the Edible Eight into positive territory in that time, what ails me this week is regional regret.

Today SEAWAY FOOD TOWN <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEWY)") else Response.Write("(Nasdaq: SEWY)") end if %> reported record second quarter earnings and announced a 2-for-1 stock split. The stock was strong, closing at a new-high of $31 3/4. Problem is, the regional grocer was on the E8 over the first two months of the year, going from $27 to $25 7/8. Missing out on a 20% rise as the market finds lower ground is not how I like to spend my recollections. Picking the right companies is good, timing them well is better.

Ever since the launch of our food area, I had been showing public displeasure for the large supermarket chains. They were overpriced, but beyond a successful short of WINN-DIXIE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WIN)") else Response.Write("(NYSE: WIN)") end if %> I missed out on putting my ideas where my mouth was. Then I said the one niche within the grocery biz which should fare well, regional grocers, who were not only undervalued but also attractive takeover candidates, but never held on to one long enough to see the prosperity.

Consider RISER FOODS (ASE: RSR), one of the original eight back in January, 1996. Over the next three months it went from $16 1/8 to $19. When April rolled around, the strong regional supermarket chain was off the list and while I felt it might have another tick or two of upside there were new frontiers to conquer. Today the stock sits at $33 1/2.

Yes, my strife, in full color, not a pretty picture at all.

But, stife, like life, goes on, and on a more current front it should have come to no surprise now that QUAKER OATS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OAT)") else Response.Write("(NYSE: OAT)") end if %> poured out Snapple that analysts would be quick to raise earnings estimates. Yesterday the company said that quarterly earnings estimates of $0.18 a share should be blown away. They will be at least the $0.22 a share they earned the year before. Of course that is excluding the $8.40 a share hit the company is taking as a "Yes, we really did overpay for that new age beverage company" charge.

THE EDIBLE EIGHT

In a quiet week in the markets, a 20% gain in E8 repeat visitor ALPINE LACE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LACE)") else Response.Write("(Nasdaq: LACE)") end if %> helped trim our annual losses to 0.1%. Okay, no confetti and annoying noisemakers, but at least we are ahead of the secondary market and well ahead of the IBD: Retail-Restaurants Index, which continues to tread in double-digit losses year-to-date.

1997 Returns To Date:
The Edible Eight        -0.1%
NASDAQ                  -4.3%
S&P 500                 +2.4%

Until next week, Digest Foolishly,

MF Edible

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