Wendy's is suddenly a meme stock

Apparently any stock can attract the attention of Reddit traders.

woman about to eat a burger

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of The Wendy's Company (NASDAQ: WEN) were rocketing 18% higher on Tuesday after the WallStreetBets subreddit crowd apparently turned its attention to the fast-food chain and mentioned it as a possible short squeeze candidate.

Chat room traders this year have driven up the shares of a number of companies that short-sellers have bet heavily against. While squeezes are not uncommon, retail investors have driven the discussion since January when they rallied together to support GameStop (NYSE: GME) and lash out at hedge funds that overplayed their hands.

Wendy's, though, is an unlikely stock to serve as a rallying point for Reddit investors, as there were just 8.2 million shares sold short at last count, down almost 18% from the prior period and amounting to just 4% of the shares outstanding.

With days to cover standing at around 2.5, it doesn't seem like a strong candidate to carry the banner next.

Wendy's stock is actually up 43% from the 52-week low it hit in March, and last month beat analyst expectations for first-quarter results, posting revenue of $460 million and generating adjusted profits of $0.20 per share.

That was notably better than the $444 million in revenue and $0.14 per share in earnings Wall Street anticipated.

While the meme stocks of the trading frenzy that started 2021 continue to capture the Reddit crowd's fancy, such as AMC Entertainment Holdings (NYSE: AMC), which has doubled in the past week alone, there have been a few other stocks that were curious choices, such as Tootsie Roll Industries (NYSE: TR), whose stock spiked over 100% in January and still trades 15% above where it started the year.

Wendy's has several tailwinds, including a returning workforce and a bullish outlook by management that raised full-year guidance.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

Four investors stand in a line holding cash fanned in their hands with thoughtful looks on their faces.
Economy

Up 20% this year. Does the S&P 500 Index have more in the tank for 2024?

Will US stocks hold up after the election?

Read more »

two young boys dressed in business suits and wearing spectacles look at each other in rapture with wide open mouths and holding large fans of banknotes with other banknotes, coins and a piggybank on the table in front of them and a bag of cash at the side.
International Stock News

2 magnificent S&P 500 dividend stocks down 27% to 51% to buy and hold forever

These stocks hold potential to act as growth and income plays.

Read more »

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year
International Stock News

One Wall Street analyst thinks this emerging Artificial Intelligence stock could rise 60% in the next year

SoundHound AI is on the doorstep of a big year.

Read more »

man looks up at apple on his head
International Stock News

Why did Warren Buffett sell more Apple shares?

Does Buffett know something we don't?

Read more »

A male party goer sits wearing a party hat and with a party blower in his mouth amid a bunch of balloons with a sad, serious look on his face as though the party is over or a celebration has fallen flat.
International Stock News

What snapped the S&P 500 winning streak last night?

The S&P 500 almost made October a winner, but fell at the final hurdle.

Read more »

Man going down a red arrow, symbolising a sliding share price.
International Stock News

Why Nvidia stock is sinking today

Investors were spooked by economic data and the ambitions of a deep-pocketed rival.

Read more »

Rede arrow on a stock market chart going down.
International Stock News

Why Microsoft stock is sinking today

Microsoft just beat quarterly earnings estimates. So why is the stock falling?

Read more »

US economy and sharemarket with piggy bank
Share Market News

Here's why Goldman Sachs sees a decade of lower returns ahead for US shares

Aussie investors have placed a lot of faith in US shares this year.

Read more »