This Restaurant Stock Has Been Acquired By Josh Brown, But There's A Catch

Josh Brown, chief executive officer of Ritholtz Wealth Management, said he bought shares of Toast a few days ago

Nevertheless, he warns that this is only a temporary measure.

Trade Algo reported that Brown said: "I wouldn't recommend anyone following me into here as a trade," and he added. “This is one of the biggest investments I have ever made.” 

According to Brown, he is considering buying more shares in the company in the coming days, particularly in light of the company's impending earnings announcement scheduled for February 16. Interestingly, Toast's share price has fallen significantly in the aftermath of its earnings announcements the last two times it has reported. 

Founded in 2011, the cloud-based digital restaurant platform became publicly traded in September of 2021, a year after its launch. Since November 2021, the price of the company's shares has fallen almost 58% from what it fetched at its peaks trading price of $59 in November 2021. 

Despite heading back in the right direction, Brown said the stock has been "absolutely crushed," though it is on its way back. "We have never been in a better position than we are today in terms of the business." 

As a result of the growing number of dining-out occasions, Brown believes that Toast is a smart play on both increased consumer spending as well as the growing popularity of dining out. 

Despite Toast not having penetrated much of the restaurant market, he explained that Toast is still a leader across the industry, and that it is unique because it is "entrenched" in and is a part of every aspect of building, running, and managing a restaurant, from the kitchen to the sales team.

In light of their rapid growth, Brown describes them as having a secular growth story that's going to continue for years to come. As opposed to buying any individual stock in a restaurant, this is a much better way to buy shares in a group. I believe this one is comprehensive enough to cover the whole spectrum."