5 Restaurant Stocks to Buy Now

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During the last bull market, there was a trend to go large in the fine dining space. Upscale restaurants that worked in one location were quickly duplicated in other cities. Once large enough, many of these chains became publicly-traded companies.

Now in the midst of a deep recession, the upscale space is experiencing a huge unwind. In one middle-market city that I visit periodically, there have been several upscale restaurants that have closed over the last month alone.

Those with ties to public companies are seeing their stocks devalue accordingly. For example, I rate upscale steakhouse Morton's (MRT) a D, or sell.

It has been a train wreck of sorts. Within that carnage, though, there is a category of restaurants that is actually doing very well in this environment: The casual dining space. It seems that high-end diners are trading down in order to continue dining out.

Here are five casual dining restaurant stocks that are right in the sweet spot of this soft economy.

Next: Restaurant Stock #1 - P.F. Chang's China Bistro