Stock Turn Around Play

This post is about it being good to go against the herd sometimes when investing. I have a common sense out of favor conservative stock to consider to buy right now. I am talking about Wendy’s/Arby’s Group, symbol WEN. This company, the third largest, publically traded fast food company, lately has come on hard times. The stock has taken a huge haircut and is trading close to its 52 week low. In other words everyone has been selling so it’s now on sale big time. As the recession took hold they were very slow to introduce lower priced value items to their menu and as a result their earnings took a big hit. They are introducing breakfast items at Wendy’s and a value menu at Arby’s this year. These 2 things should help turn around their growth prospects. Also as the economy turns around people will start to eat out more and this company should benefit from this improvement. Their food is on the higher end of the fast food spectrum. It’s quality is almost as high as the casual dining sector they compete with. I believe as the economy turns people will trade up to their stores quicker than going out to eat at the lower end restaurants. They do have a small dividend of around 1.25%, so this helps also while you wait for the turn around. While this stock is more risky than many other I have posted about believe it’s a good long term buy. Tony