Sonic (SONC, $16.70, up $0.13) continues to trade higher on no real news. The restaurant sector has done well over the past few weeks and Sonic has participated in the rally. Lower oil prices have helped fuel a recovery from some of the lows as many of these stocks got hammered after Wall Street released pessimistic views for the quarter.
Most restaurant companies have reported their financial results so we will see what happens from here. We will still get monthly updates on the sector when same-store sales are reported and let’s hope the trend continues. However, let’s protect our profits just in case they slip from here.
Sonic was a great buy at $14 on 6/30 and we got an early Christmas present with the December 17.50 calls (ZSQLW, $1.35, up $0.45) which were trading for 70 cents. They are now up nearly 100% from our entry price. The calls don’t expire until December 19 but go ahead and sell half of the position today and set a stop of $1.00 on the other half.