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 in +4.29% Uptrend, growing for three consecutive days on February 11, 2025
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where QSR advanced for three days, in of 305 cases, the price rose further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
The 10-day moving average for QSR crossed bullishly above the 50-day moving average on February 18, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The 10-day RSI Indicator for QSR moved out of overbought territory on February 12, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 35 similar instances where the indicator moved out of overbought territory. In of the 35 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on February 21, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on QSR as a result. In of 85 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for QSR turned negative on February 21, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at .
QSR moved below its 50-day moving average on February 19, 2025 date and that indicates a change from an upward trend to a downward trend.
QSR broke above its upper Bollinger Band on February 10, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for QSR entered a downward trend on February 10, 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 (6.510) is normal, around the industry mean (5.013). P/E Ratio (19.594) is within average values for comparable stocks, (54.259). Projected Growth (PEG Ratio) (1.149) is also within normal values, averaging (1.860). Dividend Yield (0.037) settles around the average of (0.041) among similar stocks. P/S Ratio (3.365) is also within normal values, averaging (8.544).
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 PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent 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 Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady 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 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 82, placing this stock better than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
an operator of restaurants
Industry Restaurants