Screened 2026-09-07 · the tape above runs as of 22:12 UTC · 11 Sep · two dates, stated on purpose · verdict and workings shown in full · never trimmed
The Label · The Season, Not the Day
This name holds its accumulation label.
Arcos Dorados Holdings Inc. holds its Accumulation at $8.17. Consolidating, no directional conviction, held for 10 days.
As held on the ledger · 2026-09-07
Phase
Accumulation
Quantitative state
Consolidating, no directional conviction, held for 10 days
Price at the screen
$8.17
Valuation
6.64 trailing · 9.50 forward price to earnings
Values screen
FAIL
Beta
0.49
The Workings
Five Screens, Shown in Full
Does not pass. Debt ratio
Test
Figure
Limit
What it means
Status
Business activity
Permissible
Core business clean
Its core business isn't built on prohibited lines: no gambling, alcohol, tobacco, weapons, or interest-based lending.
Pass
Debt load
131.11%
Below 33%
Interest-bearing debt is 131.1% of its assets, above the one-third ceiling the screen allows.
Fail
Interest-bearing cash
24.66%
Below 33%
Cash held in interest-bearing accounts and securities is 24.7% of assets, under the one-third limit.
Pass
Receivables
0.00%
Below 49%
Money owed to the company is 0.0% of assets, under the 49% limit.
Pass
Revenue purity
0.00%
Below 5%
Only 0.0% of revenue comes from non-compliant sources, under the 5% line.
Pass
Five checks adapted from AAOIFI screening standards: business activity plus four balance-sheet ratios. All five must pass for ethical clearance. Every figure is arithmetic on public accounts, not judgement.
What the Numbers Say It Is Worth
The Fair Value Range
Our framework reads AVOID: it trades at roughly a 65% discount to our $13.49 fair value, moderate competitive moat, 14.30% revenue growth.
Fair value range in USD, drawn from the 2026-09-07 screen. The gold marker is the market price at the same screen. A 65.1% margin of safety to the base estimate.
Third-party analyst targets: 9 covering, consensus Buy. The average target sits +41% from the screen price.
Reading the gap · Both our model and the analysts see meaningful upside from here.
Price History & Projections
Where it has been, where the models see it going. History from market close data; projection points are our fair-value estimates and third-party analyst targets, dated to the 2026-09-07 screen.
Fair value and rating are our own model estimates; the Street's range reflects third-party analyst estimates. Analysis, not advice.
The Business, in Plain Words
Latin America's biggest McDonald's franchisee fails on debt
Picture a queue for burgers stretching from Sao Paulo to Mexico City. Arcos Dorados runs those outlets, yet its balance sheet already carries more leverage than our screens allow. The business posts 13% revenue growth and a 36% return on equity, yet profit margins sit at just 5% and the ethical screen flags the debt ratio immediately. That single failure rules the name out before any valuation debate begins.
We pass for two clear reasons. First, the debt breach sits outside our tolerance regardless of the 9.7 times forward earnings multiple or the 58% gap to our fair value. Second, consumer cyclical exposure means today's low multiple can simply mark peak earnings rather than a bargain. Analyst targets cluster near 12 dollars, but none of that offsets the ethical red line.
Risk sits around leverage in volatile currencies and thin margins that leave little room for shocks. The moat is only moderate and offers no protection once debt service costs rise. Analysis, not advice.
The risks · The things to watch: it's a small-cap, so the share price can swing harder than the market; it carries a real debt load, which raises the stakes if revenue slips.
Plain-English interpretation of our own screen data. Analysis, not advice.
Where & How to Trade
ARCO trades on the NYSE. As a listed security it is accessible through almost any international broker offering its home market. New to this, or investing from abroad? Our guide to accessing global markets covers brokers, currencies and the practical steps.
The Dated Journal · Newest First, Never Edited
Every Entry, As Written
2026-08-21Markdown · changed$7.78-5.5%Entry 6
The framework has shifted from distribution to markdown since the last review. Price is trending lower. Sellers are in control and the prior trend has reversed. Price has moved down 5.5% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows negative risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 14% above its long-term trend line with momentum reading neutral. Over the past year the shares are up 15%. Our forward projection puts the odds of a 10% gain over the next month near 19%. The street (9 analysts) rates it buy, with a mean price target of $11.
2026-07-21Distribution$8.23+0.4%Entry 5
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved up 0.4% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows modest positive risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 14% above its long-term trend line with momentum reading neutral. Over the past year the shares are up 15%. Our forward projection puts the odds of a 10% gain over the next month near 19%. The street (9 analysts) rates it buy, with a mean price target of $11.
2026-07-18Distribution$8.20+0.0%Entry 4
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows modest positive risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 14% above its long-term trend line with momentum reading neutral. Over the past year the shares are up 15%. Our forward projection puts the odds of a 10% gain over the next month near 19%. The street (9 analysts) rates it buy, with a mean price target of $11.
2026-07-17Distribution$8.20+0.0%Entry 3
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows modest positive risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 14% above its long-term trend line with momentum reading neutral. Over the past year the shares are up 15%. Our forward projection puts the odds of a 10% gain over the next month near 19%. The street (9 analysts) rates it buy, with a mean price target of $11.
2026-07-03Distribution$8.20+0.0%Entry 2
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows modest positive risk-adjusted returns.
2026-07-02Distribution$8.20Entry 1
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows modest positive risk-adjusted returns.
Each entry above was written on its date, before the outcome. A journal you can prune is not a journal.
