Actually, I wrote the November 55 calls for 4.80. If the stock goes way up (unlikely IMO), I still have a rate of return of over 50% (annualized) on the investment. If it goes back down, I get to keep my option proceeds. On a cash on cash basis, the call premium alone is at nearly a 30% rate. I'm happy with that.
i do not think there is much downside risk beyond 50.
I think there is significant risk, but the 'current dynamic' needs to change. By that I mean sky-high p/e ratios and enterprise values need to bear some semblance to cash flows/reality. That of course will take higher interest rates (they are a comin' BTW)......All JMHO......Good luck to all....
Guidance in the earnings p/r was systemwide comp sales growth of 8.3% to 8.8%.
Given that the release date was Aug 9th, which corresponds exactly to the end of the comp store period, I would guess that management had a pretty good handle on company store comps, which turned out to be 8.2%. This implies (assuming guidance wasn't lowballed) that franchisee comps were expected to be 8.5% to 9.0%. Given that franchisee comps were 9.1% and using the implied midpoint of franchisee comps, it looks like the outperformance was about 0.35% for franchisees.
What does a 0.35% outperformance for franchisees mean to the bottom line of pnra (assuming they can sustain it for the whole quarter)?
Franchise royalties and fees were $12.1 million during the last quarter. 0.35% of $12.1 million
pre-tax net income will be $42,350 higher than what would be inferred by the Aug 9 p/r.
After tax, this is about $27,500.
With about 30 million shares outstanding, this represents a little less than 0.1 cents in eps.
The conference call made clear that as of that date Pnra had the results for 19 of the 20 days for company stores and 15 of the 20 for franchised stores who report to Pnra with a small lag.
Pnra had gone down too much recently so that any positive surprise caused shorts to cover. Today's rise is no more complicated than that. Pnra is fairly priced in the mid 50s. Selling options -- covered calls or puts-- is the way to go for now.
...And yet another example of a growth stock company pumping the stock to appease investors just as they are getting nervous about the falling share price. Since pnra does not pay a dividend, the only way for investors to make money is by share price appreciation. This all resembles the tech growth model of the late 90s. If you need to be told what happened there, then you shouldn't be in the market.
yeah right, gas is sooo expensive I am going to start only hitting up McDonalds for lunch on tuesdays and fridays for the dollar nuggets and fish sands. PNRA is here to grow and stay. been long since 1999... do the math