[video] Jim Cramer Quick Take: How to Play Panera Heading into Earnings
NEW YORK (TheStreet) -- Panera Bread Company
Cramer said the company has struggled to keep up with competitors Chipotle Mexican Grill
Cramer said that if Panera CEO Ron Shaich -- one of his "Bankable 21" CEOs from his new book, Get Rich Carefully -- was able to more efficiently handle lunchtime crowds, the stock could go to $200.
If Shaich fails to improve the peak hours rush efficiency, then the stock is likely headed back down to $150, he said. Either way, the stock is going to move about $25. In this regard, Cramer views it a good risk-to-reward setup with the use of call options, so the downside will be limited.
Cramer acknowledged that even companies with solid operations can get whacked on earnings, referring to the recent results and subsequent price action of Whole Foods Market
But he concluded that investors should take a chance on Panera, perhaps by shorting the common stock and buying call options, a strategy that's highlighted in greater detail in his new book.
-- Written by Bret Kenwell in Petoskey, Mich.