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By David Urani

The action in Wendy's (NASDAQ:WEN) today was crazy. When this was written, with an hour and a half left in trading, it looked as if it could triple its average daily trading volume; at one point it was up more than 7%. The funny part is there seems to be almost no sign of news. For smaller-cap stocks this happens from time to time, but for a known company like Wendy's the driving news usually doesn't fly under the radar like this.

Just giving WEN a first-glance overview, the stock really doesn't even look that attractive to me. The company has missed the earnings consensus in two of the last four quarters, FY 2013 revenue is only expected to be +4% year over year, and its five-year expected EPS growth is in line with the sector at 13.8%. I wouldn't call those bad numbers, but they don't seem to justify its hefty valuation at 28x forward P/E and 2.0x PEG. In fact, Wendy's pre-reported some of its Q4 results last month, which included a 0.2% decline in North American same-store sales.

Given stats and a valuation like that, I'm usually not inclined to dig much further into a stock, and subsequently I'm reluctant to be a buyer at the moment. However, the stock's action today is strong enough to suggest somebody knows something that apparently hasn't crossed the news wires.

(click to enlarge)

Source: Stock Action: Wendy's