RBD - Restaurant Brands

[blackcap]

The PE of 20 is similar to what some power companies trade on. One might say the reasons are similar too.

1/ Established business models, with sustainable cashflow
2/ To some extent recession resistant. People still need power and will trade down from a more expensive meal out to a takeaway in a time of recession.
3/ Both bricks and mortor operations unlilkely to have serious new era internet competition.
4/ Share yield supported by the very low bank term deposit rates.

I understand your unease blackcap, as a PE of 20 is high. But if you sold where do you go for an alternative recession resistant income return? Answer that question and I might sell a few RBD myself! In the meantime I am happy on the share registar right here.

SNOOPY

Hi Snoopy,

How about TNR... PE of 10 but with the following characteristics that you mentioned?

1/ Established business models, with sustainable cashflow
2/ To some extent recession resistant. People still need cars and will trade down for a less expensiove model in times of recession. Loans may do better then as well.
3/ Both operations unlilkely to have serious new era internet competition. (or Trade me would have taken it by now.)
4/ Share yield supported by the very low bank term deposit rates.


I would rather buy TNR at a PE of 10 and div yeild of 6% (give or take) with superior growth prospects, than RBD with a PE of 20. Although that said, I still do hold the RBD as Winner has so succinctly pointed out that the squiggly line still seems to be going in the right direction. I just question how much longer.

[Snoopy]

A new KFC will be opening in the Christchurch eastern suburbs soon. Also two ‘Carl’s Junior’ outlets will be built in Christchurch this year, the first being at the old clock tower site in Hornby.

As Christchurch Westies will know (or maybe they won't, because it opened so quietly), the first Carl's Junior Store in the South Island opened at the Bush Inn Centre, beating Hornby by a few weeks. A coupon leaflet arrived in the mail yesterday. So I took the opportunity to make my first ever visit to a Carl's Junior (for lunch).

I wasn't quite sure what I ordered from the picture. What came was 'pulled pork' on a bed of potato "thingies" (round double layer potato slices with holes in them, with a barbecue seasoning and cheese and sauce on top). My coupon gave me a drink too so I chose L&P, without ice.

Big mistake on my part! The drink came first and the sugar shock was would have floored even the fast food faithful. Did we really invent that drink in Paeroa? Or is the stuff you buy now a Coca Cola corruption of the original? Or maybe the person who put the syrup into the bulk mixer confused tablespoons and teaspoons? Just make sure if you order L&P, you order ice to make it palatable!

Was pleasantly surprised to see the target demographic ('hungry young men') wasn't really working. OK I tell a lie. A group of four hungry young punks came in just as I was leaving. But the majority of the customers looked 30+, with just as many hungry(ish) young(ish) women as men at the table. I reckon one or two of those customers might have even started their age with a 5! All good for shareholders though. Happy to see a broad demographic of customers. There was music blaring out, but it wasn't headbanging enough to clear the site of oldies. Those high back American milkbar style benches muffle the background noise. So you can have a conversation if you want. Plus there is the option to sit outside at the high bench on a nice day too.

The food? I'll go back one day soon and try a burger. But my pulled pork platter, was flavoursome and distinctive, served hot with minimal delay, even if you wouldn't serve such a concoction at a cardiologists convention. Ok I did strike a relatively quiet time. And I now admit that I smuggled in a home grown salad to balance off the all American taste. Not big enough to avoid a heart attack. But big enough to ensure I made it home before any cardiac arrest.

[menu note: Not sure if replacing the burger buns with lettuce leaves quite cuts it as the official healthy menu option. Has any customer ever ordered that?]

The service was pleasant and efficient. What is more the staff had initiative. If they weren't busy behind the counter they were out the front of the restaurant cleaning up. Top marks to the store manager.

I happened to walk out past the Burgerfuel competition that sits in the same shop row. It wasn't quite as busy. But when the novelty of Carl's wears off, the Upper Riccarton Arena will make a fascinating contest.

SNOOPY

[Lewylewylewy]

The squiggly line is a funny one because it is both cause and effect. It's increase is the effect of success and potential success (which is the cause), but it causes a trend which has the effect of an increase.

The line goes up recently because the potential success abroad is massive. This could become a multi bagger due to recent activity...

[Snoopy]

Hi Snoopy,

How about TNR... PE of 10 but with the following characteristics that you mentioned?

I do have a very few TNR blackcap. Yes I agree they deserve a look. But being a finance company there is trade off between profit and the quality and resilience of the loan book to consider. At least with RBD we don't have to worry about finance. It's a cash business!

SNOOPY

[Lewylewylewy]

I don't think anything like the full value of the international status had been priced in yet, if anyone is looking for a new investment.

... Of course buying now would be a confidence vote that they're can make the new operation work. If it goes well, I think it could be a 2x bagger.

Worth investigating...

[BIRMANBOY]

Ah the ever optimistic investor...buy high and sell higher. Hopefully. There must be easier ways of investing than this, surely?

I don't think anything like the full value of the international status had been priced in yet, if anyone is looking for a new investment.

... Of course buying now would be a confidence vote that they're can make the new operation work. If it goes well, I think it could be a 2x bagger.

Worth investigating...

[Lewylewylewy]

Ha-ha

Are they high though? Dividend yield is good and PE isn't too bad. They've just opened up business in a whole new (larger) country. It is a little optimistic, as I mentioned it would be a vote of confidence that they could perform in their new venture... But if they can do there what they've done be here, I see them being worth double.

I guess time will tell if I'm wrong, it usually does

[BIRMANBOY]

Well good on you for being a futurist of the most proactive nature and undoubtedly you have been blessed with a sunny disposition...you must be a joy to be around. However surely investing is about trying to minimize the unknowns and wot ifs and trying to zone in on areas that have a higher likelihood of succeeding? The very important first phrase most investors usually learn is "Buy low and sell high". Buying at the moment surely is counter intuitive to this? However there still seem to be people buying so God bless them and their belief. I have done extremely well out of this share so wish it well but it seems to me that time comes along eventually for even old friends to be cut loose. As for your points ...
"Are they high though? Yes SP historic highs
" Dividend yield is good and PE isn't too bad." No DY is low and PE is high.
"They've just opened up business in a whole new (larger) country." Well good luck on that...OZ has buried many NZ entities although international brands will fare better no doubt.

Ha-ha

Are they high though? Dividend yield is good and PE isn't too bad. They've just opened up business in a whole new (larger) country. It is a little optimistic, as I mentioned it would be a vote of confidence that they could perform in their new venture... But if they can do there what they've done be here, I see them being worth double.

I guess time will tell if I'm wrong, it usually does

[Lewylewylewy]

Lol, well thanks for being the Ying to my yang. We will see how it goes.

[Rep]

"They've just opened up business in a whole new (larger) country." Well good luck on that...OZ has buried many NZ entities although international brands will fare better no doubt.

RBD have a very large fetid corpse buried in the state just south of NSW that was associated with an international brand that they thought they understood. RBD filled a very large pissoir of money - with the proceeds of the sale and leaseback of the NZ KFC sites they owned - and flushed it away in Victoria with only a very bad hangover and a lot of debt from buying a bunch of Pizza Hut Restaurants that bled money in more ugly ways than a bullfight.

There is little question that they have what looks to be a well operated acquisition in QSR Pty and makes sense for Coupolos join the board along with presumably an earnings based contingent payment.

But what works in NZ doesn't necessarily work across the ditch - as a number of NZ entities have learned.... expensively.

Russel will be extremely aware of this - he was on the management team when it crossed the Tasman last time.