The What
Here’s a longer-term play to consider…long Wendy’s (WEN).
Some Fridays I give in to my gluttony and have McDonald’s breakfast. My gut bomb of choice has been the Sausage McMuffin. I don’t produce enough cholesterol, I know, that’s backwards, but the only way to get supplemental cholesterol is by eating animal protein. So, I indulge on occasion.
Nothing fills my cholesterol cravings more than McDonalds hashbrowns. But wringing the oil from one of those starchy slabs could get you a 20-mile ride in a bio diesel powered car.
Wendy’s has been running tv spots hyping their new breakfast menu, so I saddled up the old Audi (2010 and going strong) and ventured out for a change of pace.
The So What
Wow, a curious pallet brightened my day. I’m stunned at how much better the Wendy’s breakfast is. Yuuuge. Bigly better!
Sorry for borrowing vernacular from the phantom of fast food himself, but those expressions fit. It’s not a fair comparison. It’s like a stacked-deck bake-off between Wolfgang Puck and some random short-order cook.
The prices of a breakfast combo meal are comparable between the two companies. But Wendy’s is leading with epicurean flare. Instead of hash browns they serve skin-on potato wedges seasoned with cracked black pepper and garlic powder.
Did I catch a hint of rosemary? They were hot, crisp, and minus the oil-spill-on-a-stick McDonald’s offers. They might even be air fried. The sausage, egg, and cheese group-hugged by a fresh croissant made me a convert.
The Wager What
Whatever your poison, you’re going to have to boost your cardio for the day to cover the caloric sins—or maybe you justify it as the go-to for breaking your intermittent fasting routine. Exploring fundamentals, Wendy’s is equally superior.
My preferred shorthand for fundamentals is the Piotroski score, bundling numerous measures into one comprehensive score between 0 and 9, with 9 being the highest score. McDonald’s is mired in the middle with a score of 4, while Wendy’s has nailed down a 9.
Checking their charts underscores why I only consider fundamentals for some of my longer-term trades. McDonald’s is breaking out (up) and Wendy’s is in “what-evs” territory having been range-bound for a year.
For entering a long in WEN, I want to see it take out the August high close of $24.04. But it’s a prospective value play right now, and I could be convinced of selling a put spread or even a cash-secured naked put at the 22 level.
McDonald’s (MCD) is at an all-time high. And today’s shooting star pattern (a gap up which runs up and then falls back near its open) could be an exhaustion signal.
Combine that with the McFlurry machines always being out of service and you could have a short candidate.
Seriously, the FTC is investigating MCD for the ice cream machines’ perpetual broken status.
If I bite on this setup, it would be more of a longer-term trade (like months).
Disclaimer
My prospective trades are not a recommendation nor advice to buy or sell securities. I am not a licensed financial advisor and cannot give individual advice. This exchange of ideas is for educational purposes only and is just me sharing what I do in a few of my accounts.
You make your own choices, and you should do your own analysis or seek help from a licensed advisor. There is a chance you could lose all your money. Trade small and manage risk. A large part of my process is automated, and some is manually entered so there may be occasional errors. All data are thought to be reliable, but there is no guarantee of accuracy.
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