Diamond Hill Capital Management Inc. Buys 50,557 Shares of Arcos Dorados Holdings Inc. (NYSE:ARCO)

Key Points

• Diamond Hill Capital Management Inc. has increased its stake in Arcos Dorados Holdings Inc. by 27.5%, now owning 234,596 shares valued at approximately $1.89 million.
• Arcos Dorados recently faced a decline in quarterly earnings, reporting an EPS of $0.07, which was below analysts' expectations of $0.13.
• JPMorgan Chase & Co. downgraded Arcos Dorados from an "overweight" to a "neutral" rating, adjusting their price target from $10.50 to $8.80.

Diamond Hill Capital Management Inc. grew its stake in shares of Arcos Dorados Holdings Inc. (NYSE:ARCO - Free Report) by 27.5% during the first quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The institutional investor owned 234,596 shares of the restaurant operator's stock after buying an additional 50,557 shares during the period. Diamond Hill Capital Management Inc. owned 0.11% of Arcos Dorados worth $1,891,000 at the end of the most recent reporting period.

A number of other large investors have also recently made changes to their positions in ARCO. Price T Rowe Associates Inc. MD lifted its position in shares of Arcos Dorados by 40.1% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 13,463,466 shares of the restaurant operator's stock valued at $98,015,000 after buying an additional 3,851,704 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its stake in Arcos Dorados by 96.0% during the 4th quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 3,280,985 shares of the restaurant operator's stock valued at $23,886,000 after purchasing an additional 1,606,821 shares during the period. Franklin Resources Inc. raised its stake in Arcos Dorados by 88.1% during the 4th quarter. Franklin Resources Inc. now owns 2,611,023 shares of the restaurant operator's stock valued at $19,008,000 after purchasing an additional 1,223,260 shares during the period. General American Investors Co. Inc. bought a new stake in Arcos Dorados during the 1st quarter valued at approximately $3,076,000. Finally, Renaissance Technologies LLC raised its stake in Arcos Dorados by 730.4% during the 4th quarter. Renaissance Technologies LLC now owns 422,934 shares of the restaurant operator's stock valued at $3,079,000 after purchasing an additional 372,000 shares during the period. 55.91% of the stock is owned by hedge funds and other institutional investors.

Arcos Dorados Price Performance

ARCO traded down $0.08 on Monday, hitting $7.13. 554,689 shares of the company's stock traded hands, compared to its average volume of 1,501,093. The company's 50 day simple moving average is $7.52 and its 200-day simple moving average is $7.68. The firm has a market cap of $1.50 billion, a price-to-earnings ratio of 10.93 and a beta of 0.63. Arcos Dorados Holdings Inc. has a one year low of $6.66 and a one year high of $10.55. The company has a current ratio of 0.86, a quick ratio of 0.81 and a debt-to-equity ratio of 1.80.

Arcos Dorados (NYSE:ARCO - Get Free Report) last released its quarterly earnings data on Wednesday, May 14th. The restaurant operator reported $0.07 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.13 by ($0.06). Arcos Dorados had a return on equity of 26.70% and a net margin of 3.00%. The firm had revenue of $1.08 billion during the quarter, compared to the consensus estimate of $1.02 billion. During the same period in the previous year, the firm earned $0.14 EPS. The business's revenue was down .4% compared to the same quarter last year. As a group, research analysts anticipate that Arcos Dorados Holdings Inc. will post 0.63 EPS for the current year.

Arcos Dorados Cuts Dividend

The company also recently disclosed a dividend, which was paid on Friday, June 27th. Shareholders of record on Wednesday, June 25th were paid a $0.06 dividend. This represents a yield of 3.13%. The ex-dividend date of this dividend was Tuesday, June 24th. Arcos Dorados's payout ratio is 36.92%.

Wall Street Analysts Forecast Growth

Separately, JPMorgan Chase & Co. downgraded Arcos Dorados from an "overweight" rating to a "neutral" rating and decreased their target price for the company from $10.50 to $8.80 in a research note on Wednesday, July 2nd.

About Arcos Dorados

Arcos Dorados Holdings Inc operates as a franchisee of McDonald's restaurants. It has the exclusive right to own, operate, and grant franchises of McDonald's restaurants in 20 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the U.S.