Restaurant Brands International (QSR.TO)

In this market, you want to own earnings growth and this is a company that will continue to deliver it. Traditionally this was not managed for costs, but they got the costs down to half of what it originally was at Burger King, and will do the same thing at Tim Hortons. They were also able to open 2000 Burger King locations in 4 years internationally, and will do the same thing with Tim’s. Dividend yield of 1.31%.

He passed on this because it is quite expensive. One of the things you find in the Canadian market, especially this kind of market, is that when people look to go away from resources, there are only a small number of companies to choose from and sometimes they get bid up quite expensively.

(A Top Pick Aug 8/14. Up 44.44%.) Formerly Tim Hortons that got taken out. Sold his holdings into the offer.

This appears to be very well-managed by a couple of young Americans. It is steadily doing well after a bit of bottoming.

He loved THI-T. He does not own this one. They were just in a major cost cutting mode. We’ll see if this global franchise expansion actually works out. At these valuations it is a very expensive stock.

The valuation of 30X earnings is extremely expensive. A lot of things have to go right to justify the current stock price compared to the earnings. Has a lot of debt.

Wendy’s is still affiliated with it. He is dissatisfied with the takeover and the new structure. He does not like stocks at 35 times earnings. He took profits from Tim Horton’s and moved on. He is going to watch from the sidelines for a meaningful correction.

(Market Call Minute.) This is very, very expensive, however they still produced a pretty decent quarter. A Hold at best.

(A Top Pick March 27/14. Up 65.01%.) Got a little cold feet and sold his holdings, probably a little too early.

Wendy’s is not involved. They are doing great things in Poland, for example. Tim Hortons now has a chance to be Global.

Thinks 3G is over hyped. MCD-N has a lower PE in comparison. He thinks it is a speculation. Prefers Yum Brands. THI-T was a cleaner story.

Restaurant Brands 6%, April 1, 2022. Tim Horton’s and Burger King. A lot of debt. Management did a great job of taking out costs in previous companies so thinks they will do it again. Berkshire put capital into the preferreds at 9%, but he is lower in the capital structure.

Thinks this has been overhyped. A very highly levered company, which also concerns him. This is not the type of stock you want to own when markets are at all-time highs.

Long on McDonald’s (MCD-N) and Short on Restaurant Brands (QSR-T). Good strategy? He could see intuitively how it could do well, but he would advise against it. McDonald’s has a lot of headwinds. It is not seen as a health conscious menu and a place where people go eat healthy. This company has Tim Hortons which has a lot of growth potential and a lot of potential for cost-cutting.

This was the old Tim Hortons along with Burger King. He doesn’t see as much upside at this level and is going to wait and see how the next couple of quarters pan out. They are leveraged to a turnaround here.