Should You Take a Bite of the Latest Restaurant IPOs?
Filed under: Investing, Stocks in the News, Food & Drink

It's been more than two months since Facebook's (FB) messy IPO cooled the market for new listings, but things are starting to heat up again.
It's not as if the market is hungry for upscale steakhouses again. Ruth's Chris parent Ruth's Hospitality (RUTH) has been trading in the single digits since late 2007. The parent company of Morton's of Chicago agreed to be acquired late last year, but that buyout also took place in the single digits.
Del Frisco's had to make sacrifices to make its own deal happen. Underwriters originally planned to offer 7 million shares for as much as $16 a share. Uninspiring demand resulted in the chain offering just 5.8 million shares at $13 apiece. Save Room for Dessert The good news here is that Del Frisco's is in a good groove lately. Revenue climbed 24% in its most recent reported quarter, and profitability nearly doubled. There's also the Del Frisco's Grille concept to warm up to. Nation's Restaurant News just named it one of its Hot Concepts for 2012. Del Frisco's Grille is a more casual spin on the classic steakhouse. The menu and decor is more modern, and there's even a rooftop bar to draw patrons upstairs before, after, or in lieu of the restaurant itself. The company itself realizes that it has plenty of expansion room for all three of its concepts. There are still plenty of major cities that don't have any of the company's eateries. Del Frisco's plans to open three to five new locations annually, giving it years of growth if it's able to successfully introduce its iconic steakhouses in new territories. Del Frisco's wasn't the only restaurant chain to go public last week. Chuy's (CHUY) -- a chain of casual Tex-Mex restaurants that stand out because of their hourly made salsa and Elvis Presley shrines -- also went public at $13 last week. The market seems hungry for restaurant stocks. Let's see if indigestion kicks in again this time.Related Articles
Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Facebook. Motley Fool newsletter services have recommended buying shares of Facebook.
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Source: http://www.dailyfinance.com/2012/08/01/restaurant-ipo-del-friscos-outlook/