Restaurant company Fat Brands Inc. , owner of such restaurant chains as Fatburger and Ponderosa, has agreed to acquire the Johnny Rockets restaurant chain from the private equity firm Sun Capital Partners for about $25 million.
The acquisition is expected to be completed in September, following which , Fat Brands said it will have more than 700 franchised and company-owned restaurants globally, and it expects to generate annual system-wide sales more than $700 million.
According to Fat Brands, the transaction will be funded through cash on hand and proceeds generated from the company’s securitization facility.
Tickeron's analysis shows : FAT's price moved above its 50-day Moving Average on August 12, 2020. This price move indicates a change in the trend, and may be a buy signal for investors. In 17 of 21 cases where FAT's price crossed above its 50-day Moving Average, its price rose further within the subsequent month. The odds of a continued Uptrend are 81%.
Current price $3.53 crossed the resistance line at $3.52 and is trading between $3.63 resistance and $3.52 resistance lines. Throughout the month of 07/13/20 - 08/12/20, the price experienced a +12% Uptrend. During the week of 08/05/20 - 08/12/20, the stock enjoyed a +9% Uptrend growth.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Indicator suggests the ticker price trend may be in a reversal from a Downtrend to an Uptrend. 30 of 40 cases where FAT's Stochastic Indicator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued Uptrend are 75%.
The Momentum Indicator exceeded the 0 level on August 11, 2020. Traders may consider buying the ticker or exploring call options. In 42 of 59 cases where the ticker's Momentum Indicator exceeded 0, its price rose further within the subsequent month. The odds of a continued Uptrend are 71%.
The Moving Average Convergence Divergence (MACD) just turned positive. Considering data from situations where FAT's MACD histogram became positive, in 16 of 24 cases, the price rose further within the following month. The odds of a continued Uptrend are 67%.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where FAT advanced for three days, in 80 of 112 cases, the price rose further within the following month. The odds of a continued Uptrend are 71%.
Bearish Trend Analysis
The higher Bollinger Band was broken -- a price fall is expected as the ticker heads toward the middle band, which invites the trader to consider selling or shorting the ticker, or exploring put options. In 10 of 14 cases where FAT's price broke its higher Bollinger Band, its price dropped further during the following month. The odds of a continued Downtrend are 71%.
The Aroon Indicator entered a Downtrend today. In 119 of 150 cases where FAT Aroon's Indicator entered a Downtrend, the price fell further within the following month. The odds of a continued Downtrend are 79%.
Fundamental Analysis (Ratings)
Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 21%. During the last month, the daily ratio of advancing to declining volumes was 3.2 to 1.
The Tickeron Valuation Rating of 20 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: FAT's P/B Ratio (-11.70) is slightly lower than the industry average of (2.93). P/E Ratio (0.00) is within average values for comparable stocks, (63.02). Projected Growth (PEG Ratio) (0.00) is also within normal values, averaging (6.39). Dividend Yield (2.47) settles around the average of (1.23) among similar stocks. P/S Ratio (1.99) is also within normal values, averaging (1.89).
The Tickeron Price Growth Rating for this company is 52 (best 1 - 100 worst), indicating fairly steady price growth. FAT’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 100 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. FAT’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock worse than average.