Should Investors Believe in Wendy’s?

With shares of The Wendy’s Company (NYSE:WEN) trading at around $5.20, is WEN an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

“Where’s the beef?” was Wendy’s most memorable moment, but what Wendy’s really misses is Founder Dave Thomas. He was the heart and soul of the operation. Since his death in 2002, Wendy’s has seemed lost. Finally, the fast-food company has decided to embark on a daring restructuring operation. This includes changes to the menu, marketing, restaurant décor, and more. Wendy’s has always played third fiddle to McDonald’s Corp (NYSE:MCD) and Burger King Worldwide (NYSE:BKW), but that used to work. Now, with the industry not as strong as in the past, Wendy’s needs to make a move — or at least make some noise.

Wendy’s is going for higher quality in every area, and a new logo will be revealed in March. This might all be exciting, but let’s remember that the Arby’s merger and breakfast plan failed. However, this time around, CEO Emil Brolick is in full control. With a stellar track record at Yum! Brands (NYSE:YUM), specifically Taco Bell, his game plan seems to have more momentum and potential. Same-store sales have increased 4.9 percent over the past two years, so there is so momentum to build upon.

Let’s take a look at some important numbers prior to forming an opinion on the stock.