Ryan's Mega Bar Served Up Delicious Profits.(THE SMART INVESTOR)(WINNING WAYS)

Byline: KEN HOOVER

When Ryan's Family Steak Houses started a big move in late 1985, it had just come up with what would turn out to be a nifty idea: the 60-item Mega Bar, offering fare from chicken pot pie to Caesar salad.

The idea worked so well, it's still in existence nearly two decades later. At the time, Ryan's had only 11 restaurants, all in the South. Today it has 320 throughout the South and Midwest. The company sought to build a following of loyal customers by offering good quality food at a low price, which should not be a novel idea for anybody in business.

The concept worked, and the stock would soon be rocketing up.

In the four quarters before the stock broke out of the basing pattern that marked the start of its run, earnings rose 33%, 50%, 73% and 56%. Sales accelerated, rising 55%, 58%, 58% and 89%. The five-year earnings growth rate was 83%. The Earnings Per Share Rating was 99. The Relative Strength Rating was 90. Ryan's had reported 12 straight quarters of growth of at least 33%.

This would not be the first time Ryan's had been a big winner. Soon after going public in 1982, the stock ran up 442% in less than a year. It then built a 2 1/2-year base before taking off again in November 1985.

No worries if you missed the first breakout in November. The best time to climb aboard would have been in January 1986 after the stock built a 10-week flat base that corrected 12% from intraday high to intraday low.