PNRA/DM – Well now I have time to look.  

They actually hit earnings ($1.82) but missed on revenue.  Guidance was fine, not great but fine.    Our old target for PNRA from the Income Portfolio was $155 from last July.  We had the Jan $140/155 bull call spread at $4.35 and sold the $125 puts for $9.30.  If we assume PNRA can hit $8 in earnings, $155 remains a very fair target (less than 20 p/e).  They added 114 stores off 1,800, so 5% growth there and same-store comps are good.  

With 1,900 and a $5Bn valuation, that's $2.6M per store vs CMG's 1,800 stores and $21Bn cap for $11.6M/store.  CMG drops $450M to the bottom line on $4Bn in sales and PNRA drops $200M to the bottom line on $2.4Bn in sales so CMG should rightly demand a 100%, maybe 150% premium per store but not 350% so either CMG is overvalued (it is) or PNRA is under-valued (it is).  Somewhere in between lies the truth and, in this case, that makes PNRA a reasonable investment here.  

You can sell the PNRA 2017 $125 puts for $7.75 and use it to fund the 2017 $135/155 bull call spread at $11 for net $3.25 on the $20 spread that's almost 100% in the money.