Brian Acker, CAWendy's CompanyWENDON'T BUYMay 05, 2005
Caller: Heard that 15% is owned by a couple of hedge funds that are going to pressure the company to turn Tim Horton's into an income trust. Brian: Wendy's has always looked good to him. If you are buying on fundamentals or mis-pricing, it's not. Model price is $44.42.
Doesn't follow this closely, but the fast food sector is very competitor as people watch their spending. She owns MCD instead, because MCD owns the real estate of their branches, so they collect rent. Because they are global, MCD enjoys economies of scale. It's defensive.
Struggled to find its place. His team prefers stocks with positive momentum (up and to the right). They don't double down or bottom fish. Might be turnaround potential for deep-value investors.
options Wendy's is seeing huge calls, from 20,000 last month to 40,000 today at just one strike on Nov. 20. The stock and calls are moving higher. He bought calls. He bought and will upside calls against them as it rallies.
He fears that most fast food companies can't hold their gains because of inflation. Be careful with this as much as he likes Wendy's. They report Wednesday.
The street doesn't give this respect, as shares have been stuck in the low-$20s for 14 months. Today they reported a top and bottom line beat, including 16% same-store sales growth, and raised its full-year forecast a lot and hiked its dividend by 20%. And yet, shares rallied only 4%, still below pre-Covid. It's still cheap.
A recent meme stock that got pushed early last week to nearly $30, then sold off over $5 quickly. The meme people helped made rich Wall Street shorters, the same people the memers claim to hate.