Nicole Miller Regan

Let's begin by talking about the best management teams in your group.

I always go back to [CEO] Jerry Deitchle at BJ's Restaurants. He's been able to take in the economic pressures and then funnel them down to his concept with a balanced approach. I would also credit P.F. Chang's with staying true to its core message and brand and quickly cleaning up the balance sheet. Finally, Panera has been extremely transparent, which has given them a lot of credibility.

What do you make of the promotion of Bert Vivian to co-CEO at P.F. Chang's?

Bert is a critical part of the puzzle. He has always been [CEO Rick Federico's] right-hand man, and the promotion is a testament to [Bert's] success. [Rick] may be grooming him for bigger and better things to come.

Chipotle elevated President Monty Moran to co-CEO at the same time.

Monty's promotion was clearly more operational in nature. Because he has been successful operating and managing the store-level process, I think [Chipotle] is saying, “Now we'd like to use [Moran] as a strategic tool.”

Do these promotions help the stock price?

I don't know if it moves the stocks in the short term. Long-term investors take these changes seriously. The promotions were perceived positively by the Street.

Where are these companies positioned in terms of balance sheets?

Chipotle and Panera have pristine balance sheets. Both carry a nice cash balance and generate a whole lot of free cash flow. P.F. Chang's balance is going to rebound. Their cash-flow yield is going from 5 percent to 15 percent. Debt is minimal and will be completely extinguished by year end.

Will anything produce a near-term rebound for these companies?

It's all macro today. Look at industry-specific factors driving the group. Take commodities, for example. Costs are very benign, and the group is down and not up. The stocks are not trading on company-specific fundamentals or industry factors that today are probably more positive than negative. Instead, they are trading on consumer confidence, the personal savings rate and gas prices.

I guess asking if stocks are fairly valued on fundamentals seems ridiculous.

[Laughter.] We've tried to slice and dice past recessions to compare the situation today, keeping in mind it's not apples to apples. Our research shows that what had been a historic [P/E] low of 15 times in the past now bottoms out at 9 times. That figure has tended to set off a little recovery rally that so far has been short-lived.

Yet that could be an incredible buying opportunity.

If you look out over time, this group trades at 1 to 2 times a PEG [P/E to growth ratio]. But now there's no growth. Still, if you believe the economy recovers and these companies grow again, they are trading a massive discount to that 1 to 2 PEG. To anyone operating under the belief that recovery will happen, it's a great buying opportunity.