Burger King (BKC) went public in May 2006 and has seen a doubling of its stock price since August of 2006. If you were paying attention to our blog in 2006, you might recall the article “Burger King (BKC) – Whopper Covered Calls”. The stock has gained over 50% since we wrote the article.
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The CEO, John Chidsey, thinks the company has streamlined its business model and can anticipate strong growth in the near term. He stated in an AP article, “We’ve cleaned up a lot of issues and really built ourselves a very solid foundation from which it is much easier to grow.”The company has also leveraged the star power of Sean “P. Diddy” Combs who appeared in a recent ad announcing Burger King’s new late night hours. The CEO said of their new strategy, “Burger King, because it had had so many management teams, it had had so many advertising agencies, so many different strategies, I think the consumer was very confused, so bringing back the King, bringing “Have it Your Way” back, lots of things like that have certainly helped people talk about the brand again.”
The company has reported 13 consecutive quarters of positive sales growth and has begun a new global strategy. They are hoping to open around 200 new restaurants this year.
Looking at this News from an Options Trading Perspective:
There is no guarantee Burger King will continue on its meteoric rise. This blog entry, as with all of the blog entries here, is design to show an investor how the powerful PowerOptions search tools can be used to identify the best option trades for a given market outlook. Because option data is often cumbersome and difficult to find, an investor requires the aid of a solid tool to help them sort through the noise. With its 14-day free trial, there’s really no reason not to take PowerOptions for a test drive. We think you’ll find the interface easy to use and you’ll be finding desirable option trading ideas in no time.
PowerOptions has trading experts available to help investors more fully understand the option trading process. They can be reached, toll free, at 877-992-7971. There are additional resources on the PowerOptions website for investors to learn more about the fun and exciting world of option investing. The following links, Help with Options, How to Write Covered Calls and Investing in Options are all great resource articles to help you get the hang of options trading.
Potential Trades:
The following Burger King option trade has 124 days until expiration. The McDonalds and Wendy’s trades have 33 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
| PowerOptions covered calls Fast Food (124 and 33 days) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BKC | $26.73 | BKCJE | 07 OCT $25.00 | $2.90 | 10.80% | 4.90% | 4.90% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCD | $52.17 | MCDGX | 07 JUL $52.50 | $1.05 | 2.00% | 2.10% | 2.70% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WEN | $39.73 | WENGH | 07 JUL $40.00 | $1.45 | 3.60% | 3.80% | 4.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BKC:
The Burger King trade involves the October $25 call option and offers 10.8% downside protection and 4.9% potential profit if the stock is above the $25 strike price at the end of the option period.
MCD:
The McDonald’s trade involves the July $52.50 call option and offers 2.0% downside protection and 2.7% potential profit if the stock is above the $52.50 strike price at the end of the option period.
WEN:
The Wendy’s trade involves the July $40.00 call option and offers 3.6% downside protection and 4.5% potential profit if the stock is above the $40.00 strike price at the end of the option period.
Competitors:
Competitors for BKC include: McDonald’s Corp. (MCD), Wendy’s International Inc. (WEN), Yum! Brands Inc. (YUM), CKE Restaurants Inc. (CKR), Jack in the Box Inc. (JBX), and Sonic Corp. (SONC).
Competitors for MCD include: Burger King Corporation (BKC), Yum! Brands Inc. (YUM), Doctor’s Associates Inc. (private), CKE Restaurants Inc. (CKR), Jack in the Box Inc. (JBX), Sonic Corp. (SONC), Tim Hortons Inc. (THI), and Wendys Intl. Inc. (WEN).
Competitors for WEN include: Burger King Corporation (BKC), McDonald’s Corp. (MCD), Yum! Brands Inc. (YUM), and CKE Restaurants Inc. (CKR).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
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[tags] John Chidsey, AP, Sean “P. Diddy” Combs, Doctor’s Associates Inc., BKC, Burger King Holdings Inc., CKR, CKE Restaurants Inc., JBX, Jack in the Box Inc., MCD, McDonalds Corp., SONC, Sonic Corp., THI, Tim Hortons Inc., WEN, Wendys Intl. Inc., YUM, Yum Brands Inc., covered call investment strategy, help with options, how to write covered calls, investing in options, investment strategy, iron condor, option investing, options trading, poweroptions, stock option trading, stock options [/tags]