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Wendy’s – Purchased Another 3,000 Shares

Wendy's

Today, October 13, 2025, the Value Investment Fund purchased a second tranche of Wendy’s stock. The restaurant’s pool acquired another 3,000 shares at $8.75. The total investment is $27,000, including the 25-cent per share transaction fee. 

The Fund now owns 6,000 shares with a total cost basis of $57,750. The Facilitator has determined the intrinsic value for a share of Wendy’s at $12. See the article: Wendy’s – Intrinsic Value, Buy and Sell Points for details about Wendy’s as an investment. The intrinsic value range is from $8 to as much as $14, depending on which of the various methods used to compute intrinsic value is utilized. There is a high level of confidence at $12. A discount rate of 25% is best to derive the buy price. The difference between intrinsic value and the buy price is called the safety margin. 25% discount against $12 sets the buy point at $9 a share. 

Value Investing - Principle #1 Risk Reduction

There are four principles of value investing. No other principle with value investing is as critical to success as risk reduction. With securities, risk reduction is achieved via five required elements:

Risk Reduction

  • Only high quality securities are considered, i.e. those in the upper tiers of investments, Mid-Cap to Mega-Cap companies.
  • Gain a full understanding of the industry for knowledge tied to standards, business principles, and KPI's.
  • Prefer investments that have strong book values which provide financial depth to withstand economic downturns.
  • Only consider securities that have demonstrated stability over long periods of time (18 to 25 years). 
  • Select companies that pay regular dividends and the annual yield at current market prices exceed 5%.

Each of the above are risk reduction factors. Risk increases at an accelerating rate once a company's market value goes below $5 billion. Furthermore, without financial depth and stability, investing begins to tend towards speculation. Value investors have a primary rule: NEVER EVER lose money on an investment. Act on Knowledge.

 

There are several positive risk reduction elements met by Wendy’s, including the following:

  • Positive net earnings for more than 15 years;
  • Continuously increasing revenue for 15 years;
  • Franchise fees are growing at more than 5% year over year;
  • Wendy’s pays a quarterly dividend of 14 cents per share, generating a dividend yield of 6.2% on a $9/SH investment;
  • Wendy’s book value per share is 67 cents.

The recovery price is preset at a minimum $14 within one year, with a four-year target of $20 per share. Act on Knowledge.

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