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The Wendy's Company Message Board

  • porchoggs porchoggs Sep 12, 2013 1:11 PM Flag

    My Opinion...

    The clown is making an ill advised move getting rid of their dollar menu! I didn't mind the. Angus burger- they got rid of those. Used to get a few double cheeseburgers when slumming- now those are gone. Not complaining but big mistake in my opinion. Margins must have been hurting them....

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    • Is it true that most if not all of profits go towards paying the dividend?

      • 1 Reply to valueintime
      • Listen to the most recent conference of the deceiving things when looking at the P/E is that the earnings are being netted against depreciation of their real estate assets. So, the way I see it cash flow is coming in but WEN has the luxury of netting it against depreciation to minimize taxes. As WEN moves forward with its plans to sell the majority of company owned units to franchisees, we will see less depreciation covering up the earnings and more hitting the bottom line.

        This WEN story is about a balance sheet transformation along with the improved image and product offerings. I think the balance sheet is largely misunderstood as shown by the appx 40m shares sold short. I'm confident that this could be a $20 stock in a couple years. This stock could double from current levels and still have a market cap under $7 with a very manageable amount of debt. There is also potential down the road for a buyout (the CEO used to work for YUM brands) or just getting the company on a platform for significant expansion on their own. The stock has been beaten down over the years due to poor capital allocation in its many incarnations under Peltz. Now the tide has turned and management can actually focus on reviving the WEN brand.

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