This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Food for Thought

NEW YORK ( TheStreet) -- The quest for value can be both fun and profitable but the rewards from the identification and purchase of a stock that many investors have avoided go beyond monetary rewards.

That is, of course, if your thesis is correct. It is a thrill to go against the wisdom of the crowd, identify positive attributes that few others see, and ultimately be right. But the search for value does not always work out the way you hope it will.

There are times when you identify what you believe to be a compelling opportunity, do the research, get comfortable with the story (warts and all), take the position, wait for it to play out and ultimately throw in the towel.

Not every idea will come to fruition, and value investors tend to be very patient. Sometimes that patience pays off handsomely and sometimes it does not. Ultimately, the sell decision can be even more difficult than the buy decision. Falling in love with your stocks can certainly exacerbate the reluctance to close a position.

I recently reached the end of my rope with Wendy's (WEN - Get Report), a name that I'd owned the past three years. While this position was profitable, it was just marginally so, and I should have been out earlier.

What was a compelling story in 2009, the then-number 3 fast-food chain in the U.S. merging with Arby's, a deal led by the legendary Nelson Peltz, has not unfolded as I'd expected.

Arby's turned out to be a disaster and was badly hit during the recession. Same-store sales fell off of a cliff, and it became clear that the roast beef sandwich chain was an anchor around Wendy's neck. The company ultimately sold the chain last year for $430 million (retaining an 18.5% stake as part of the deal), and it seemed like a new beginning.

But overall performance since then has been marginal at best, and Wendy's has not been delivering the earnings numbers necessary to drive the stock higher. New lines of burgers and salads have not done the trick either; nor has the effort to reintroduce breakfast, at least at this writing.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
WEN $11.09 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%
GOOG $558.40 0.00%
TSLA $203.34 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs