Well, they’re the only two stocks I own at the moment, and I couldn’t feel more at ease holding them.
Why Panera Bread Co (NASDAQ:PNRA)?
After buying Panera Bread Co (NASDAQ:PNRA) for around $129 — more or less its high in the summer of 2011 — you can understand my surprise when the company shed 20% or so of its value. I had inklings of selling the stock early, but I held on because of three things I knew at the time:
1. The company was among the healthiest — if not the healthiest — food options.
2. Ronald Shaich was fanatical about growing Panera Bread Co (NASDAQ:PNRA).
3. Panera Bread had become a “fourth place.”
On the first point, I’m not sure if I have to explain. Googling for a few minutes, you’ll find plenty of reviews touting Panera as the “Healthiest Fast Food Restaurant.” In fact, in 2008, Health.com rated it America’s No. 1 Healthiest Fast Food Restaurant.
Second, Panera Bread Co (NASDAQ:PNRA) has Ronald Shaich, its talented founder, chairman, and co-CEO. For those who don’t know, before founding Panera Bread in 1993, Shaich co-founded another bakery-cafe chain, Au Bon Pain, in 1981. Now, the history is a bit detailed, but the main takeaway is that Shaich has been in the fast-casual restaurant business for decades. He knows what works and what doesn’t.
Finally and most important, Panera Bread Co (NASDAQ:PNRA) is the only other place I consider workable. You know how Starbucks is famed for creating a “third place” between work and home, a place where you can study, talk with friends, relax? Well, sometimes I need a little more than coffee, and sometimes I’m just deathly tired of going to the same old Starbucks everyday. Panera Bread Co (NASDAQ:PNRA) is the “fourth place.”
So should you buy Panera today? Well, maybe. For me, I wouldn’t.
I still think the company has a great management team as Shaich still holds the same positions. However, the company’s product value has declined, in my opinion. Not only do the portion sizes at Panera Bread Co (NASDAQ:PNRA) seem smaller (or they’ve always been that size and I’ve grown larger), but the food doesn’t have the same finesses or hearty feel it used to.
I am holding onto my Panera shares, though. The company trades at a premium 28 P/E and the company continues to push its stock price higher. Though this may be a risky time to hold, I don’t think there’s any other restaurant that comes close to being a “fourth place.”
Panera Bread Co (NASDAQ:PNRA) makes up $986 of my portfolio.
Why Baidu.com, Inc. (ADR) (NASDAQ:BIDU)?
I bought Baidu.com, Inc. (ADR) (NASDAQ:BIDU) in February at about $96. Since then, the company has shed more than 8%. However, I’m more bullish than ever.
