By Tommy Hughe Wendy’s Corporation (WEN) has been trading near all-time lows since late 2008. Hit hard by the US financial crisis, the ensuing recession and an unprofitable merger with Arby’s, many are asking when Wendy’s will bounce back. The stock, which lost nearly 75% of its value in one day, has had a volatile year. Currently trading around $5, WEN has been stuck in a trading range with little hopes of breaking out. What will it take to bring Wendy’s back to its peak? Momentum is weak and without direction, I think the answer is a return to good fundamentals. Wendy’s is current p/e is over 48 with the forward looking version at 24. This makes Wendy’s way overpriced. Price to earnings for the the Dow stocks range between 9-18 with an average dividend around 3%. Wendy’s is returning 1.5%. Earnings in 2011 were weak compared to analysts estimates and are only up about 1.5% from 2010. Loss in the third quarter of 2011 widened over the previous year to $4 million despite an increase in revenue. However, total revenue for the quarter grew by 2% to $611.4 million. Analysts were expecting a much larger increase to $619 million….
Wendy’s Looks Ready For a Big Breakout
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