What Happened?
Shares of fast food chain El Pollo Loco (NASDAQ:LOCO) jumped 15.3% in the morning session after Biglari Capital offered to acquire the company. Reports revealed LOCO was evaluating the proposal, indicating that a deal was likely to be done. Importantly, Biglari already held approximately 15% of LOCO's shares, making it a significant stakeholder with vested interest in the company's direction.
The shares closed the day at $10.16, up 9.5% from previous close.
Is now the time to buy El Pollo Loco? Access our full analysis report here, it’s free .
What The Market Is Telling Us
El Pollo Loco’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for El Pollo Loco and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock gained 35.3% on the news that the company reported strong first quarter 2024 results that beat analysts' same store sales, revenue, gross margin, and EPS expectations. Same store sales benefited from an increase in average check size due to increases in menu prices and an approximately 1.2% increase in transactions. The company planned to open two new company-owned restaurants and five to seven new franchised restaurants, likely pointing to healthy demand for its offerings. Zooming out, we think this was a fantastic quarter that should have shareholders cheering.
El Pollo Loco is down 8.6% since the beginning of the year, and at $10.43 per share, it is trading 24.7% below its 52-week high of $13.86 from August 2024. Investors who bought $1,000 worth of El Pollo Loco’s shares 5 years ago would now be looking at an investment worth $1,134.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. We prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. .