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    MARKET EDGES

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On 5/19 we published a note titled, “WEN - Undervalued Yes, Where is the Opportunity?” that discussed WEN’s stock and provided a sum-of-the-parts analysis that suggested that the company’s stock was trading below its intrinsic value.

I said at the time, “Over the years, Trian Partners has been extremely successful at creating value from mispriced securities.  In the almost two years since creating the Wendy’s/Arby’s Group, it has now created one of those mispriced equities.  Can Trian and senior management fix WEN again?”

After the close yesterday, Train said in a 13D/A filing that it recently received an oral inquiry from a third party expressing interest on a preliminary basis in a potential acquisition involving WEN.  Our sum of the parts analysis from 5/19 values the WEN at $7.70.  We value the Wendy’s business at $6.30 per share and the Arby’s business at $1.40 per share.  Send me an email if you would like additional details.

Thus far WEN is the third company to announce some sort of value enhancing initiative.  Fist it was CKE, then CPKI and now WEN.  If you are looking for the next possible candidate I would bet on EAT...

Howard Penney

Managing Director