RBD - Restaurant Brands

[Snoopy]

Charts suggest RBD has peaked out. Everyone out now?

I guess a pure chartist might be out, but this is yet another example of why you might not want to be a pure chartist. At $2.45 RBD is on a PE of around 9. For a company that has steady growth prospects this PE is too low.

An article appeared in the Auckland Herald last week pointing out that Kiwi's had not taken to Starbucks and it was effectively a dog. Russel Creedy would be able to admit that finally when he sold the whole lot onwards as a growing concern. This is old news.

There have been also articles in the press about how tough a time retailers are having. Interestingly, RBD was forced to make a statement to the stock exchange in mid January 2011 that unlike other retailers, RBD profits are in fact on track to grow strongly.

IMO the selling down of RBD has happened for no reason, as part of a flow on effect from other retail shares. RBD is probably now the cheapest share on the NZX when considering just the fundamental valuation. IMO those selling out of RBD over the last month or so are either pure chartists, or insane.

SNOOPY