The fast-food business is going great guns. McDonald's
Declining results aren't just for the small-fry operators. News from Wendy's
Backyard Burger's turning point may have come when Yum! Brands declined to continue using the vendor in its multi-brand units. Since then, Backyard has continued to add outlets, but the last four quarters have seen declining gross profits.
Backyard is also hurt by its presence in the southeastern U.S., where Hardee's, a CKE Restaurants
Wendy's, however, presents a different problem for investors. The company is restructuring by shedding its Tim Horton's unit. Can it get its namesake restaurants back on track after buying back $1 billion in stock? Investors will have to wait and see. At 18 times trailing earnings, net of restructuring charges and impairment of goodwill, Wendy's provides a less expensive way -- at least as measured by its earnings multiple -- to do so.
The big lesson here: Industry trends can point you to promising stocks, but that doesn't mean everything you find will agree with your portfolio. Choose carefully before you chow down.
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