Stock price when the opinion was issued
Good business economics. Really strong brands that generate a lot of cashflow. His hangup is the balance sheet, it's not investment grade. In times of turmoil access to credit could be restricted, and acquisitions are not in easy grasp. Lots of value at 16x PE.
As the economic situation gets tighter, discretionary items get cut. Consumers may not want to cut, but they may have to. Unemployment in both Canada and US are ticking up, and any discretionary items will be impacted.
Trades at 20x EBIT over EBITDA, about normal. Shares are below a declining 200-day MA, but still above 200-week MA. Rising input costs of labour and commodities, as well as competition, have really held shares back. Question of saturation in Canada. Challenge to scale meaningfully outside NA. Franchise execution risk.
It has recently pulled back. The executive chairman did very well with Dominoes as their CEO and is moving the stock price up. He had to buy $30 million of stock with his own money for $200 million in compensation. Although his success with Dominoes is good for the stock, it hasn't moved up too much.
Large array of brands including Burger Kind/Tim Hortons. Company debt loads are too high for preference. Good job at managing company through M&A - however would prefer other options in the market.