PZZA has been a long-term underperformer on the charts
Controversial pizza chain Papa John's International, Inc. (NASDAQ:PZZA) is back in headlines this morning, this time because of takeover rumors. A report from the Wall Street Journal (subscription required) said that Nelson Peltz's Trian Fund Management -- which owns a 13% stake in fast food chain Wendy's (WEN) -- is evaluating a bid for the company. In response, shares of PZZA are up 6% at $53.44, at last check.
It's been anything but positive for Papa John's stock over the past year, as it's shed 28% year-over-year, and in mid-August plunged to a three-year low of $38.05. Adding resistance has been the 160-day moving average, a trendline which has pressured the shares since early 2017.
Surprisingly, analyst sentiment has been optimistic toward Papa John's stock, with four of the six covering analysts sporting a "strong buy" recommendation. However, the stock's average 12-month price target of $51.17 comes in at a deficit to current levels.
Also sporting optimism have been near-term options traders. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 0.37, which ranks in the low 13th percentile of its annual range. In other words, near-term options traders have rarely been more call-biased in the past year.
Lastly, while short interest on PZZA rose just 1.5% during the most recent reporting period, it currently represents 23% of the stock's total available float. At its average daily trading volume, it would take shorts over a week to buy back their bearish bets on Papa John's stock.