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$WEN: Lambo?

  • u/RazKaz-Na
  • Jun 6, 2021
  • 1 min read

I was inspired to look into Wendy's stock ($WEN) a few days ago after seeing this post on this sub. Here is a shortlist of why I think this is a good buy.

  • Q1 earnings showed the beginning of their recovery from pandemic woes.

  • Same-store sales up 13%

  • Q1 85% of dining rooms were open, Q2 should be close to 100% open.

  • Q2 2020 was the hardest hit by the pandemic, Q2 2021 should be the time where recovery becomes growth, smashing yoy numbers.

  • Big breakfast push, breakfast was about 3% of same store sales increase in a limited market. Target EOY is 10%.

  • New and international expansion

  • Consensus estimate price is around $27, its already at a discount

  • $150M loaded up and ready for buybacks.

  • Quarterly dividends have already recovered from pandemic slashing and should continue to grow.

  • Very low volume right now. (Avg 3M shares/day)

  • Scarcity: Float of 220M, Insiders own 21%, institutions own 73%. Only 6% or 13M shares available to retail, which sounds bad until you consider the next bullet point.

  • Most memed company on the internet if it gains traction then, frenzy+scarcity+low volume means minimal buys could push the price quickly.

My open positions are very bullish and my plan is to accumulate shares up to about $26 before August and ride the wave on the cheap options I already own. Current open options.

FD calls: $25 strike, 6/18 exp. $0.05 price/share

Earnings calls: $28, 8/20 exp, $0.10 price/share

I'm a financial professional so DYOR and let me what you think.

 
 
 

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