Sonic Sees Unusually High Options Volume (SONC)

Sonic Co. (NASDAQ:SONC) was the recipient of unusually large options trading on Tuesday. Investors acquired 1,490 put options on the company. This is an increase of approximately 1,420% compared to the average volume of 98 put options.

Shares of Sonic (NASDAQ:SONC) opened at $24.89 on Thursday. The company has a current ratio of 1.81, a quick ratio of 1.81 and a debt-to-equity ratio of -2.87. The company has a market capitalization of $951.07, a price-to-earnings ratio of 16.82, a price-to-earnings-growth ratio of 1.10 and a beta of 1.59. Sonic has a 12-month low of $22.11 and a 12-month high of $30.05.

Sonic (NASDAQ:SONC) last issued its quarterly earnings data on Thursday, January 4th. The restaurant operator reported $0.30 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $0.25 by $0.05. Sonic had a negative return on equity of 28.95% and a net margin of 13.68%. The business had revenue of $105.40 million for the quarter, compared to the consensus estimate of $106.86 million. During the same period in the prior year, the business earned $0.24 earnings per share. The business’s revenue was down 18.7% on a year-over-year basis. equities analysts predict that Sonic will post 1.53 EPS for the current year.

Sonic announced that its Board of Directors has initiated a stock buyback plan on Thursday, October 26th that authorizes the company to repurchase $160.00 million in outstanding shares. This repurchase authorization authorizes the restaurant operator to repurchase up to 14.9% of its stock through open market purchases. Stock repurchase plans are usually a sign that the company’s leadership believes its shares are undervalued.

The business also recently disclosed a quarterly dividend, which was paid on Friday, February 16th. Stockholders of record on Wednesday, February 7th were given a $0.16 dividend. The ex-dividend date of this dividend was Tuesday, February 6th. This represents a $0.64 annualized dividend and a dividend yield of 2.57%. Sonic’s dividend payout ratio is currently 43.24%.

A number of brokerages recently weighed in on SONC. BidaskClub raised Sonic from a “strong sell” rating to a “sell” rating in a report on Thursday, February 8th. Oppenheimer reiterated a “hold” rating on shares of Sonic in a research report on Friday, January 5th. UBS Group reiterated a “neutral” rating and set a $28.00 target price (up from $26.00) on shares of Sonic in a research report on Friday, January 5th. Canaccord Genuity reiterated a “hold” rating and set a $30.00 target price on shares of Sonic in a research report on Friday, January 5th. Finally, Zacks Investment Research upgraded Sonic from a “hold” rating to a “buy” rating and set a $31.00 target price on the stock in a research report on Wednesday, January 10th. Two equities research analysts have rated the stock with a sell rating, seven have issued a hold rating and six have assigned a buy rating to the company’s stock. The company currently has an average rating of “Hold” and a consensus price target of $29.64.

In related news, VP Carolyn C. Cummins sold 1,200 shares of the company’s stock in a transaction on Tuesday, December 5th. The stock was sold at an average price of $27.02, for a total transaction of $32,424.00. The sale was disclosed in a document filed with the SEC, which is available at this link. Also, Director Federico F. Pena sold 9,209 shares of the company’s stock in a transaction on Thursday, November 30th. The stock was sold at an average price of $25.22, for a total value of $232,250.98. The disclosure for this sale can be found here. Insiders have sold 130,687 shares of company stock worth $3,586,167 in the last ninety days. 8.28% of the stock is currently owned by corporate insiders.

Large investors have recently modified their holdings of the company. Wells Fargo & Company MN lifted its position in shares of Sonic by 28.7% in the second quarter. Wells Fargo & Company MN now owns 79,892 shares of the restaurant operator’s stock valued at $2,116,000 after acquiring an additional 17,822 shares in the last quarter. Atlanta Capital Management Co. L L C purchased a new stake in shares of Sonic in the third quarter valued at $7,681,000. SG Americas Securities LLC lifted its position in shares of Sonic by 117.1% in the third quarter. SG Americas Securities LLC now owns 11,418 shares of the restaurant operator’s stock valued at $291,000 after acquiring an additional 6,159 shares in the last quarter. Canada Pension Plan Investment Board lifted its position in shares of Sonic by 103.8% in the third quarter. Canada Pension Plan Investment Board now owns 300,140 shares of the restaurant operator’s stock valued at $7,639,000 after acquiring an additional 152,900 shares in the last quarter. Finally, Vanguard Group Inc. lifted its position in shares of Sonic by 1.2% in the second quarter. Vanguard Group Inc. now owns 3,596,500 shares of the restaurant operator’s stock valued at $95,272,000 after acquiring an additional 43,146 shares in the last quarter.

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Sonic Company Profile

Sonic Corp. operates and franchises the chain of drive-thru restaurants (Sonic Drive-Ins) in the United States. As of August 31, 2016, 3,557 Sonic Drive-Ins were in operation from coast to coast in 45 states, consisting of 345 Company drive-thrus and 3,212 franchise drive-thrus. As of August 31, 2016, its restaurant design and construction consisted of a kitchen housed in a one-story building, which was approximately 1,500 square feet, flanked by canopy-covered rows of 16 to 24 parking spaces, with each space having its own payment terminal, intercom speaker system and menu board.

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