GME all over the place after earnings. Now down to $152. Reality is such a bitch…
- Popeyes announces new plans to develop and open hundreds of restaurants across India, Bangladesh, Nepal and Bhutan in the coming years.
- The chain inked a multi-country licensing agreement with Jubilant Foodworks Limited to open Popeyes locations in India and neighboring countries.
- Chicken is noted to be one of the largest and fastest growing categories in India and is expected to grow rapidly in years to come.
- Source: Press Release
- Popeyes has been a positive contributor to the Restaurant Brands International (NYSE:QSR) bottom line, while Tim Hortons has been a drag.
These guys are not terribly expensive here. I do believe in their Asian expansion and I love Popeyes and Horton's can be fixed – it's just not playing well in the US (huge in Canada). They also own Burger King. $65 is $20Bn and they made $500M last year but should make $1.2Bn this year so nothing crazy about $65 with good growth potential. In the LTP:
- Sell 10 QSR 2023 $50 puts for $5 ($5,000)
- Buy 15 QSR 2023 $60 calls for $11.50 ($17,250)
- Sell 15 QSR 2023 $72.50 calls for $6.50 ($9,750)
That's net $2,500 for the $18,750 spread that's $7,500 in the money to start so the upside potential is $16,250 (650%) and our worst case is owning 1,000 shares at net $52.50 – about 20% below the current price. Margin is just $2,426 so it's an efficient way to make money but it will increase if QSR drops – so don't take it lightly.
As with any short put – as long as you REALLY want to own 1,000 shares of QSR for $52.50 – there's no harm in selling the puts.
