MTY Food Group (MTY.TO)

Management team is quite strong. They’ve done a really, really good job of growing the company. Did some fairly large acquisitions recently, so the debt profile has changed and there is a bit more risk. The real story is that same-store sales has been flat to slightly falling over the last few quarters. Likes the name, but until same-store sales start to pick up, he wouldn’t be too interested. Priced at a premium right now.

One of the best performing stars on the TSX over the past 10 years. Owns a bunch of food court franchises, and are a consolidator in that space. Very consistent ROE generators. This is one of those stocks that completely flies below the radar screen.

He has looked at it numerous times and balked at it each time. It is a little expensive for a food corp. business. He is playing the space through another one. Wait for a pullback (10-15%) before getting into it.

He loves the company and management team. Bought this at $1.65 and sold it in the $30s. The stock treaded water for a while. They’ve done a great job of acquiring and integrating, however it is a very competitive industry. Most food service stocks are showing negative same store sales growth. Made a big acquisition in the US, which was what drove the stock higher from the $30s into the $40s. Quite expensive at these levels. Prefers others.

A quick serve restaurant company. Made a great acquisition for about $310 million US which gives them a new platform to try some of their concepts in the US. It further diversifies the business, and allows them to continue to grow earnings. For the last decade, they’ve added new brands and new acquisitions every year, and have done a really good job of it. Trading at about 12X EBITDA. Dividend yield of 0.96%. (Analysts’ price target is $49.75.)

(A Top Pick Nov 22/16. Up 0.16%.) This is for the long-term, and it has only been a few weeks since his recommendation. A lot more Canadians should take a look at this. When you walk through a food court, almost half of the brands are part of this company. They generate a tremendous return on capital very consistently, and are expanding worldwide. It is still a small-cap company.

A food franchisor. An unbelievable company. ROC is very high. Dividend yield of 0.94%. (Analysts’ price target is $47.67.)

Lots of familiar brands. It is a great company. Return on capital is off the charts. They have been growing around the world.

Fast food franchises in the malls. They’ve made an acquisition to increase their US presence. Excellent operators. Probably a nice, long term growth story.

He can never get comfortable with the investment. The brands they acquired are second or third tier franchises. They have no high barriers to entry. Great CEO with good capital allocation. They have no experience in the US. He would not buy at this value.

This had an enormous jump up today. They were doing a game changing acquisition. He trimmed part of his position today. His view is to trim it, and if it comes off and buy it back.

Likes this. They were very aggressive over the past couple of years in buying a lot of fast food outlets, and now it is consolidation time. Same-store sales growth has slowed down, which is okay, but you want to see that improve.

This company has all kinds of brands, a lot of them purchased from other people. The stock has been consolidating. He has known the company for 15 years, and ROE has never been below 20%. This is a royalty company, so relatively low risk. You are getting an un-levered 24% on average ROE each year. Trading at about 12.8X 2016 earnings. A very undervalued stock. A great stock to Buy and Hold.

Has always liked this. It is an expansion of small food chains. A very good long term Hold. He would imagine that this gets taken out someday.

Has ROE every year of 20%, very consistent. Not much of any leverage in the business, and very little economic sensitivity. Extremely well-managed. Trading at 14X 2016 earnings, which is really cheap for this kind of growth. Dividend yield of 1.23%.