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$3.26 -0.45 (-12.13%)
11/19/2008 4:02 PM

Wendy's/Arby's Group (WEN)

CAPS Rating:
**

The Company is primarily engaged in the business of operating, developing and franchising a system of distinctive quick-service restaurants serving high quality food.

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Avatar NetscribeRstrnts (< 20) Submitted: 12/14/06 8:42 AM : Outperform Start Price: $5.74 WEN Score: -0.65

Wendy's International, Inc. is the third largest quick-service hamburger restaurant chain in the world, with more than 6,300 Wendy's Old Fashioned Hamburgers restaurants in North America and more than 300 international Wendy’s restaurants. The company also has a 70% stake in Café Express and 29% stake in Pasta Pomodoro.

The company recently completed the distribution of the common shares of Tim Hortens, Inc. held by Wendy’s; the distribution took place in the form of dividend to Wendy's shareholders. Additionally, it has also completed the sale of its struggling Baja Fresh Mexican Grill chain. Both these moves will allow the company to focus on its flagship brand Wendy’s. Furthermore, the management is also considering strategic options for its smaller Café Express and Pasta Pomodoro chains.

The company has just reported its fifth consecutive month of positive same store sales and anticipates for more such sales in future, with the nationwide launch of new breakfast menu. The new management of the company is focused on re-energizing the Wendy’s brand by concentrating on advertising and promotional activities.

To add to the company’s delight, the restaurant industry is showing a steady growth and the guest traffic is likely to pick up if the recent fall in oil prices continues. Moreover, the overall industry margins are expected to increase as the increased labor and utility costs are likely to be offset by lower average prices for food, especially beef, pork, and chicken. The stage is looking all set for Wendy’s to cash the tremendous opportunities in the near future. With all the developmental plans under its belt and focus on the Wendy’s brand, the company is expected to outperform in the coming months.

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Avatar NetscribeRstrnts (< 20) Submitted: 5/08/07 7:58 AM

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Shares of Wendy’s International Inc., the third-largest U.S. hamburger chain have taken an upturn on speculation that the company has received a takeover bid. The stock climbed $1.52 to $39.75 after the news that the chain may have received a takeover bid of $50 per share. Recently the company’s board of directors formed a special committee to investigate strategic options. This could include changes to Wendy's strategic plan, changes to its capital structure, or a possible sale of the company, among other options. The company said that it is considering options including a sale, merger or change in strategy. The shares have gained 22 percent since Wendy's said it may put itself up for sale.

The company also reported a robust first quarter of 2007 where in the revenue increased 2% to $590 million and the same-store sales were up 3.8% and 3.7% at U.S. company-operated and franchise restaurants respectively. The company has been under pressure from billionaire investor Nelson Peltz and former shareholder William Ackman to return money to shareholders and to boost its stock price as it competes against McDonald's Corp. and Burger King Holdings Inc.

After serious prodding from activist shareholders, the board and management are making changes to reinvigorate the core business. In line with this approach the company spun off Tim Hortons, sold the Baja Fresh chain, and is pursuing strategic alternatives for Cafe Express. The company also repurchased more than $1 billion of stock in 2006. In addition to this the company now has a more focused management team and it is also looking out to expand restaurant level profitability by adding exciting new menu offerings. All these developments are expected to make the shareholders more optimistic towards the company and the stock price is expected to rise in the coming months.

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