Jim Cramer names casual dining stocks to buy on the pullback

CNBC’s Jim Cramer on Friday told investors there are buying opportunities as the market pulls back, including three names in the casual dining space: Brinker International, Texas Roadhouse and Cracker Barrel.

“Even if the economy’s truly headed for a nasty slowdown, these chains offer the consumer great value,” he said. “And that’s exactly what the consumer wants at this moment.”

Shares of Chili’s parent Brinker climbed after its most recent earnings report impressed Wall Street, Cramer pointed out, but it has since lost those gains. He attributed the decline to number of factors also disrupting the broader sector, including pure profit-taking, softer traffic in February due to bad weather, as well as tariff concerns weighing on consumer sentiment. But to Cramer, Brinker is worth buying on weakness because the “basic story hasn’t changed at all,” as its value meals resonate with customers across income brackets.

Cramer said he likes Texas Roadhouse for the same reason he likes Brinker — the steakhouse chain offers “relative value,” seen as a bargain versus its peers. He noted that Texas Roadhouse plans to open more restaurants this year, and management is buying back a lot of stock. Cramer said the stock is a “proven winner” that can return to its highs.

Cracker Barrel stock has taken a turn over the past few weeks, with management citing weather and macroeconomic uncertainty as challenges over the last month, Cramer said. But he was impressed with the quarter the company posted Thursday, where it raised its full-year forecast and acknowledged that while February was difficult, there has been improvements in the past few weeks. While he dubbed Cracker Barrel another value-oriented company that’s a buy at these levels, he stressed that it is still a “turnaround story” and is a riskier investment than Brinker or Texas Roadhouse.

“When you look at these three casual dining plays, their stocks are down big from their highs,” Cramer said. “I think they’re absolutely worth buying.”

Brinker, Texas Roadhouse and Cracker Barrel did not immediately respond to request for comment.

Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.

Disclaimer The CNBC Investing Club Charitable Trust holds shares of Texas Roadhouse.