CKE Restaurants

CKR

Company. CKE Restaurants "is the proud owner, operator and franchiser of 3,222 quick-service and fast-casual restaurants, including 1,016 Carl's Jr.® and 2,081 Hardee's® restaurants and 106 La Salsa Fresh Mexican Grill® restaurants." (company website)

Buy. I bought CKE Restaurants last week when it settled in around $11.25 after a nice jump to a new yigh of $11.55. Money was flowing strongly into the stock (CMF), and buying pressure (green +DI line) was much greater than selling pressure (red -DI line). The stock has been rising steadily for the past six months, now more than double the price last December (see sidebar).

After I made my second buy, there were three down-days in succession. Oh, oh—

The company announced earnings yesterday and not only turned from a loss to profit, but soundly thumped all expectations in the process.

CKE Restaurants leads NYSE in percentage gainers (11:16 AM ET) NEW YORK (CBS.MW) — CKE Restaurants(CKR: news, chart, profile) jumped more than 15 percent to $12.94, the top percentage gainer on the NYSE, on strong earnings and a positive sales report. The Carpinteria, Calif. restaurant company reported after the bell Tuesday first-quarter earnings of $11.7 million, or 20 cents per share, up from a loss of 5.8 million, or 10 cents per share, a year ago. The average analyst estimate for the same period as polled by Thomson First Call was for earnings of 6 cents per share. CKE also reported that same-store sales in the four-week period ending June 14 rose 8.2 percent for its Carl's Jr. restaurants and 5.4 percent for its Hardee's restaurants.

— CBS MarketWatch.com

Sell. Yessssss! I simply could not resist the prospect of notching over 17% profits on a single day gain. I sold at a price netting me $2/share.

I toyed with the idea of selling half to lock in gains and setting a limit order to sell the rest if the price dropped back to $13.00. In the end, however, I decided to sell all the shares.

Chances are very good that this breakout on such stellar results will lead to further price gains over the next several weeks, barring, of course, bad news. On the other hand, CKR made a huge jump today, and I think chances are almost as good that it will pull back when cooler heads prevail and perhaps fill in some of that gap. If that's the case, I may jump back in. If it just keeps going— oh, well.

I've been working at trying to cover the substantial write-offs I took last month and earlier this month. Selling CKE Restaurants goes a long way to improve Trader Paul's bottom line.