Short interest on Restaurant Brands International jumps tremendously in first half of September
You might not be familiar with the name Restaurant Brands International (NYSE: QSR), but you probably know the names of the restaurants it operates. The brands include Tim Hortons, Burger King, and Popeyes. Restaurant Brands operates over 4,800 Tim Hortons, 17,800 Burger Kings, and 3,100 Popeyes in approximately 100 countries around the world.
The company got my attention for a couple of reasons recently and both of them point to a possible rally in the stock. First, I received a bullish signal on Restaurant Brands on September 30 as the daily stochastic readings made a bullish crossover. Secondly, I noticed that the short interest on the stock jumped sharply in the first half of September.
Let’s look at the chart first. We see on the daily chart that the stock was trending higher after gapping up in January. There were a few dips along the way, but the pullback in the past month has been the most severe. The selling brought the 10-day RSI down close to oversold territory before it turned a little higher and the stochastic readings reached oversold territory before making the aforementioned bullish crossover.
I found the trend line to be particularly interesting as it touched the pre-gap high from January as well as the low in March. The low at the end of May/beginning of June also touches the trend line and now this recent dip hits it yet again.
The Tickeron Price Growth Rating for Restaurant Brands is 23 and that indicates outstanding price growth. The stock price has grown at a higher rate over the last 12 months than S&P 500 index constituents. A rating of 1 points to highest price growth (largest percent return) while a rating of 100 points to lowest price growth (smallest percent return).
Turning our attention to the short interest on Restaurant Brands, the number of shares sold short jumped from 6.6 million at the end of August to 22.96 million on September 13. That is one of the biggest jumps in short interest I have ever seen and I have been watching short interest changes for almost 20 years now. The jump caused the short interest ratio to jump to 10.1 and that is extremely high. The average short interest ratio is in the range of 3.0.
From a contrarian perspective, the big jump in short interest and the high short interest ratio are both good signs. For the stock to maintain its upward trend while so much selling pressure has been applied is incredible. Secondly, if the stock resumes its upward trend, the short sellers may have to close their positions and that can add tremendous buying pressure to the stock.
As for the fundamentals for Restaurant Brands, the Tickeron SMR rating is 25, indicating very strong sales and a profitable 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 Tickeron PE Growth Rating for the stock is 29 and that indicates outstanding 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 company has seen earnings grow by an average of 27% per year over the last three years while sales have increased by an average of 12% per year over that same time period. In addition, the company boasts a return on equity of 64.8% and a profit margin of 28.3%. Both of those readings are outstanding.
QSR's RSI Indicator climbs out of oversold territory
The RSI Oscillator for QSR moved out of oversold territory on January 23, 2025. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 29 similar instances when the indicator left oversold territory. In of the 29 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on January 27, 2025. You may want to consider a long position or call options on QSR as a result. In of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for QSR just turned positive on January 24, 2025. Looking at past instances where QSR's MACD turned positive, the stock continued to rise in of 47 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where QSR advanced for three days, in of 309 cases, the price rose further within the following month. The odds of a continued upward trend are .
QSR may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 69 cases where QSR's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where QSR declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for QSR entered a downward trend on February 03, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Valuation Rating of (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: P/B Ratio (6.196) is normal, around the industry mean (5.355). P/E Ratio (15.521) is within average values for comparable stocks, (57.755). Projected Growth (PEG Ratio) (1.630) is also within normal values, averaging (1.838). Dividend Yield (0.038) settles around the average of (0.040) among similar stocks. P/S Ratio (3.532) is also within normal values, averaging (8.630).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable 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 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. QSR’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 better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating slightly worse than average price growth. QSR’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 (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.
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an operator of restaurants
Industry Restaurants