Arcos Dorados (NYSE:ARCO) Stock Sees Unusually High Put Option Buying

Key Points

• Arcos Dorados saw unusually heavy bearish options activity: Traders bought 5,000 put options, more than 22 times the typical daily volume of 216.
• Despite the options activity, analyst sentiment remains broadly positive, with the stock carrying an average “Buy” rating and a $10.50 price target; institutional investors own 55.91% of shares.
• ARCO shares fell 2.0% to $7.92. The company recently beat quarterly expectations, reporting $0.22 in earnings per share versus a $0.15 consensus estimate and $1.31 billion in revenue.

Arcos Dorados Holdings Inc. (NYSE:ARCO - Get Free Report) was the target of unusually large options trading on Thursday. Stock traders bought 5,000 put options on the stock. This is an increase of 2,215% compared to the typical daily volume of 216 put options.

Institutional Investors Weigh In On Arcos Dorados

Several large investors have recently bought and sold shares of ARCO. Public Employees Retirement System of Ohio bought a new position in Arcos Dorados during the 2nd quarter valued at about $31,000. FNY Investment Advisers LLC bought a new stake in shares of Arcos Dorados in the second quarter worth approximately $40,000. Squarepoint Ops LLC bought a new stake in shares of Arcos Dorados in the second quarter worth approximately $81,000. Baird Financial Group Inc. purchased a new position in shares of Arcos Dorados during the second quarter valued at approximately $87,000. Finally, Bank of Nova Scotia purchased a new position in shares of Arcos Dorados during the first quarter valued at approximately $116,000. 55.91% of the stock is currently owned by institutional investors.

Wall Street Analysts Forecast Growth

Several brokerages have recently weighed in on ARCO. Wall Street Zen downgraded Arcos Dorados from a "buy" rating to a "hold" rating in a report on Saturday, October 10th. Weiss Ratings raised Arcos Dorados from a "hold (c-)" rating to a "hold (c)" rating in a research report on Thursday, October 8th. Zacks Research upgraded shares of Arcos Dorados from a "hold" rating to a "strong-buy" rating in a research note on Tuesday. Finally, JPMorgan Chase & Co. raised shares of Arcos Dorados from a "neutral" rating to an "overweight" rating and increased their price objective for the company from $9.00 to $10.50 in a research report on Friday, July 17th. One equities research analyst has rated the stock with a Strong Buy rating, three have given a Buy rating and one has given a Hold rating to the company. Based on data from MarketBeat.com, Arcos Dorados has an average rating of "Buy" and an average target price of $10.50.

Arcos Dorados Stock Down 2.0%

NYSE ARCO traded down $0.17 during mid-day trading on Thursday, reaching $7.92. The stock had a trading volume of 311,719 shares, compared to its average volume of 1,388,440. The stock has a market cap of $1.67 billion, a PE ratio of 6.50 and a beta of 0.48. Arcos Dorados has a 1 year low of $6.67 and a 1 year high of $9.75. The company has a debt-to-equity ratio of 1.14, a current ratio of 0.88 and a quick ratio of 0.81. The company has a fifty day moving average price of $7.83 and a 200 day moving average price of $8.26.

Arcos Dorados (NYSE:ARCO - Get Free Report) last issued its earnings results on Friday, August 14th. The restaurant operator reported $0.22 EPS for the quarter, beating the consensus estimate of $0.15 by $0.07. Arcos Dorados had a return on equity of 12.50% and a net margin of 5.15%. The business had revenue of $1.31 billion for the quarter, compared to the consensus estimate of $1.28 billion. On average, research analysts expect that Arcos Dorados will post 0.80 earnings per share for the current year.

About Arcos Dorados

Arcos Dorados Holdings Inc NYSE: ARCO is the largest independent McDonald's franchisee in the world. The company operates and franchises McDonald's restaurants across Latin America and the Caribbean under a master franchise agreement with McDonald's Corporation.

Its restaurants offer McDonald's products, including hamburgers, chicken items, french fries, breakfast products, beverages, desserts and other menu offerings. Arcos Dorados also provides services such as McCafé, McDelivery, digital ordering and drive-thru operations, depending on the market.

Headquartered in Buenos Aires, Argentina, Arcos Dorados serves customers in approximately 20 countries and territories, including Argentina, Brazil, Chile, Colombia, Mexico, Peru, Puerto Rico, Uruguay and Venezuela.

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