MTY Food Group (MTY.TO)

(A Top Pick Oct 20/14. Up 23.64%.) The King of the food courts. Dominant franchises within the quick serves. Have been doing some acquisitions which will grow the top line by about 25%. Have about a 3% market share in Canada, and he could see them doubling that. Could see them doubling their revenue base over the next 7 years. Yield of 1.12%.

He is Short the stock. It is mostly a valuation trade. Has been a pretty good winner this year, but he thinks that winners will be sold in January, so there is a bit of a tactical aspect to the trade. Also, it is very expensive. Effectively they are going out and buying all these little chains that are in food courts, and trying to gain some synergies. At the end of the day, this is a rollup in a financial arbitrage strategy, and thinks it is pretty expensive to keep this going.

Has been around for a long time. They are Thai Express, Mr. Sub, Jugo Juice and Extreme Pita. They have close to 30 brands in their portfolio. They have done a fantastic job growing the business. He sees this as a tremendous opportunity. They can double their revenues in the next 7 years as they roll out into the US.

Had owned this from the early days ($1.25) and have recently sold all of it. Last two quarterly earnings were negative growth. They need to make an acquisition. Under $20 he would buy, but otherwise hold.

Terrific company. Very consistent return on equity. Not cheap but doesn’t think you will get a big correction on this. If you don’t own, he would dollar average by putting in about 25% every few months. Great business people.

Not a cheap stock anymore, probably 13 or 14 times earnings. Great company. Very consistent 20% per annum growth. If you buy this, just dollar average in.

A superbly run business. They basically buy up fast food restaurants. Has had a very good run. Couldn’t bring himself to buy it right now.

Bunch of food court names. Done a great job of growing earnings and revenue. But they are illiquid. He likes the management team. They don’t get a lot o respect on Bay Street because they don’t usually need money.