What Burger Was This Guy Smoking?
Don't ever simply buy a stock simply because somebody writes that it's going to go up. Always see if the idea passes the smell test. Last Saturday's "Barron's" featured an article touting burger joint Wendy's (WEN) while claiming menu tweaks and marketing could send the shares up 40%.
The author called WEN cheap at 27.8x his projected 2013 earnings estimate. That was the highest price-to-earnings ratio of six comparable companies ranging from Sonic (SONC) to McDonald's (MCD) to Domino's Pizza (DPZ). The recently raised 3.18% dividend yield was a claimed plus even though it represents an unhealthy 94% payout ratio of trailing earnings....201 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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