Hedgeye Restaurants Sector Head Howard Penney announced the removal of Noodles & Co (NDLS) from his SHORT LIST in a note to customers yesterday.
Here’s what he had to say:
“[A]t this point we believe the stock has been beat to the floor. We originally added it to our list as a short on 2/18/15, and as you see in the chart below it was a great time to get in short. Since our call the stock price has traded down 44.2% falling from $26.56 to $14.81. The valuation of this company is very much in line with where we think it is worth and we do not believe there is much more room to go lower, EV/ NTM EBITDA is down 33.8% from our call to 9.24x.
Penney’s original reasons for shorting the stock still hold true, but for the most part are now priced into the valuation.
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