Sorry. At 12% annual savings/year the $1000 original investment would equal $256,000 after 48 years, and not just $212,000. Getting old you know.
Sentiment: Strong Buy
Young people should eat at Wendys. Why? First, the rule of 72 should be used to compute savings from eating in the fast food domain. If you have a thousand dollars at age 22, and it can generate 12% growth every year for 48 years, that $1000 becomes $212,000 since the original $1000 doubled every 6 years (72 divided by 12 = 6), and 6X8 = 48, or when you reach age 70. Now at a more modest annual interest rate of 6%, your money doubles every 12 years (72 divided by 6 = 12). So that original $1000 investment becomes $16,000 (12X4 = 48)when you reach age 70. Now if you and your new wife dine at full service restaurants twice a week and pay an average bill of $25, including the tip, that amounts to $50/week, or roughly $2500/year. By dining for half that amount each time at Wendy's, you can save $1250/year! Now as you age the number of years remaining before you reach age 70 of course decreases, but you get the general idea. Dining down for most of those 48 years can yield HUGE life savings! Now if recent history is any teacher, you could exceed that 12% return by actually INVESTING in Wendys while you save all those bucks by dining there too! Wendy's stock has almost doubled in the two years that I have owned the stock. And I can't say if I have enjoyed the WENDYS food more, or the nice capital gains from owning the WEN stock. This 72 year old didn't appreciate the power of the rule of 72 until I was in my 40's. It is pretty accurate up to annual interest rates of around 30%. GOOD LUCK !
Sentiment: Strong Buy
Thank you EMIL for doing your best to LICK this decade-long Wendys malaise! Much appreciated BRO.
Sentiment: Strong Buy
My guess is that you will be quite happy if and when Wendys offers YOUR favorite menu item. That is most likely to be strawberry SHORTcake.
I saw the other day that the ex CEO of Wendys, the CEO who was at the helm for at least part of Wendy's stock price slide from 30 bucks/share down to 4 bucks only two years ago when Emil Brolick moved in as CEO, and who was still on the board of directors at Wendys, has now taken the position of CEO of Office Depot (I think it was). Does this mean that Roland Smith is no longer on the board at Wendys? I was suspicious when he was said to not want to move with his company to Dublin, Ohio "because he wanted to keep his family in Atlanta". So, in conclusion, has anyone seen any details about how Roland Smith's presence within WEN top management went during this period of the last two years when our new CEO took the reins? Was it Smith selling his 1.9+ million shares of WEN stock that recently put a big dent in WEN stock price? Should we be selling Office Depot short now? Or am I reading too much into the current changes? Thanks.
The thing I like about Wendy's is the underlying reality that they are probably one of the least "in the headlights" at risk for being run over by advancing technology. I doubt that folks in coming years will be doing "digital dining". So many companies, like Blockbusters, can become dead meat when the technology over takes their business model. And yet Wendy's, even in a down economy, has a real potential to do well as people who are now dining in full service restaurants will be "dining down" and getting family meals for about half of what they are now spending at the full service alternatives to Wendy's quick serve. I was recently told that sales at a local recently "image Activated" company owned location were up 40% since the reopening. But I have little doubt that the up to $750,000 expense for that IA update and others in progress hit earnings this year, but upon possible and even probable acceleration of this IA remodelling completion I expect the major barrier to EPS expansion to be history.
I get a genuine good feeling to be sitting in our local Wendys watching the parking lot that is nearly full while the Burger King parking lot next door may have two or three cars in it. The order line seems to be getting longer and longer inside the Wendys locations. I told a guy in front of me that I had figured out a way to not be upset by the longer lines at the order desk. I told him that he just needed to do what I did, and buy some Wendys stock, and that longer delays at the order desk bring a GOOD feeling! He thought that was a great idea.
Hey gunks, is the previous CEO still on the Wendys board? Given the rather lackluster performance of the company on his watch, it is not clear to me that I am comfortable with him being still on the BOD. Or was it the previos CFO who put our Wendys into a great buying opportunity that we see today?