7 Stocks With Real Cash Flow & Pricing Power

What would you want a company to have when Washington is split? Real cash flow, pricing power, and a balance sheet that doesn’t need Congress to agree on anything. Good Morning Alerts calls gridlock one of three threats heading into January — and it’s arriving alongside a slowing economy.

The Blue Wave Playbook names 7 stocks built for that, including a defense contractor whose backlog is already funded and a household staple people buy regardless. Plus 3 popular names they’d want out of a retirement account before January.

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🍰 The Cheesecake Factory More Than Doubled This Year

The Cheesecake Factory has had a year for the ages. $CAKE is trading around $107, up roughly 112% from $50.48 on New Year’s Eve. For comparison, the broad S&P 500 rose only about 11% over the same stretch. So a chain famous for dessert gained around 112% while the whole market gained about 11%. That is a dessert chain outrunning the entire stock market by roughly ten to one.

The fuel was a monster quarter. The company reported record revenue of $1.033 billion, up 13.9% from a year earlier and above the roughly $1 billion Wall Street expected. Comparable sales (sales at restaurants open at least a year) jumped 15.2% at the flagship chain, and traffic, meaning actual people walking through the door, rose 9.5%. CEO David Overton credited new menu items, the rewards program, and a big wave of social media buzz.

The chain even got some free advertising from a political food fight. In late October, Obama joked that Trump had the White House looking like Saddam Hussein opened a Cheesecake Factory. Trump fired back two days later, and Treasury Secretary Bessent even dined at the chain. You truly cannot buy press like that.

Here’s an angle worth understanding, too. In a market obsessed with artificial intelligence, Cheesecake Factory is what people call an “anti-AI trade.” It’s a simple, boring business that has nothing to do with chips, data centers, or AI spending. And lately, while AI stocks swing wildly and scare everyone, investors have been quietly pouring money into these old-fashioned, easy-to-understand companies instead. Expect more of these anti-AI names to get popular as people look for a calm place to hide.

• 🍰 Profits jumped. Adjusted earnings per share hit $1.02, up from $0.66 a year earlier and ahead of the $0.91 to $0.96 analysts expected.

• 🥗 Mixed siblings. Flower Child’s comps rose 11%, but North Italia’s slipped 3%, so not every brand in the family is cooking equally well.

• 🌯 Sit-down beat fast casual. Chipotle’s comps rose just 2.1% with traffic up 0.8%, compared with 15.2% and 9.5% at the flagship Cheesecake Factory.

• 🚩 The bear case. Analysts’ average price target sits below the current price, and top executives sold about $22.3 million of stock in 90 days.

• ‼️ WARNING: War-time stocks I bought last month (Ad)

The Munch Take: My wife swears she goes to The Cheesecake Factory for the salad, and somehow there’s always a slice of cheesecake on the table by the end. Investors seem to have done the same thing, showing up for a sleepy restaurant stock and leaving with a run of more than 100%. This has been a genuinely life-changing stock for anyone who bought a year ago, and that kind of return on a dessert chain is honestly staggering. So let’s be clear about one thing: we are not buying it now, precisely because it’s already gone on such a tear. The traffic numbers are real and the business is firing, but the tab is getting bigger, with analyst targets sitting below the price and insiders cashing out. Here’s the bigger takeaway, though. Cheesecake Factory is a perfect example of the anti-AI trade coming to life, a boring, understandable business winning while everyone else sweats over AI. We think more of these quiet, old-school names are going to shine as nervous investors look for somewhere simple to park their money. We missed this one, and that’s okay. The lesson is to watch the theme, not chase the stock after the party’s already roaring.

Free Playbook: What to own when Washington is split (via Good Morning Alerts)

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