Restaurant Brands International (QSR.TO)

Most analysts on the street have this as “fairly valued”. The big issue they are having is that they grew into too many categories too fast. The convenience part of this company is anything but convenient. If you own, give them the benefit of the doubt with the new CEO that they have just hired. Thinks you will find them doing well at this level. (See Top Picks.)

Chart shows this has broken an uptrend so there is a little bit of danger here. There was a peak level and support level at about $58.40. Looks like it is trying to bounce off this level. Because it broke the upper trend line, it may start to go sideways. Not super bearish but not sure he would enter into this right now.

This is one of the stocks that has had a pretty good run, but you could buy on dips. Take a partial position. He is not in that sector, however. He thinks there are better opportunities in other sectors.

Great company. Sold his holdings a few years ago when he thought it was getting too expensive. It has always been expensive and probably will always be expensive. Very profitable company, but very, very low growth right now. Saw negative same-store sales in the previous quarter. US operation is very, very small but is growing. It is going to be very challenging.

Tim Hortons (THI-T) or Dunkin’ Brands (DNKN-Q)? Chart on this shows a nice uptrend. He would stick with this one. If you are buying, try to get it between $60 and $64 and put a stop in at around $57. You may want to hedge your bet by taking a half position in both.

(Top Pick Jan 14/13, Up 29.63%) They have topped out as of late. Now they have to do the right things to get the growth back on track in the US. Now they are looking to do it via Master Franchisee.

(Top Pick Dec 11/12, Up 30.34%) Expanded food menu and have added another coffee variety and a new cup. Quebec and out west have room for expansion.

New CEO came in and is rationalizing the menu and that will help going forward. Hedge funds don’t want them to spend money in the US. With such growth over the last few years it may be time to re-balance so it is max 4-5% of a portfolio and therefore a partial sell.

Hitting all-time highs, but not because of their core business. There have been activists shareholders and there is a big share buyback happening.

Tim Hortons (THI-T) or Starbucks (SBUX-Q) for a three-year hold? About 2 months ago they did a bunch of shareholder friendly initiatives, including a new CEO who believes there are too many items on their menu. Have a dark roast coming to compete with Starbucks. They have about 77%-78% of the quick serve brewing market in Canada. If push came to shove, he would say put your money in and buy both but if you have to pick one or the other, he would go with Starbucks.

Tim Hortons (THI-T) versus Starbucks (SBUX-Q)? He definitely prefers Starbucks over Tim Hortons. This one has limited growth. Entry into the US has not worked out well for them. A lot of the upside has been because of activists coming in, and suggesting the company do something with their cash. Thinks that play is done. A tailwind is that coffee prices are at an all-time low so margins are increasing.

(Market Call Minute.) Quite an inexpensive stock. He is waiting to see what happens to it.

(Top Pick Oct 12/12, Up 30.31%) Melted up. Have agreed to take on more debt and buy back more stock. They are reassessing their expansion in the US. Don’t buy now but wait until they report and take a look at traffic growth. Look also at new product offerings that will move the ticket price up.

(Top Pick Sep 14/12, Up 20.77%) Continues to buy it on dips. One of the most wonderful companies in Canada. No limit to the growth potential. They continue to buy back stock, cash flow continues to grow and raise the dividend. If they get it right in the US or in the middle east, the opportunities are there. The stores in Canada are better than others in the US.

(Market Call Minute.)