Restaurant Brands International (QSR.TO)

Approaching valuation levels where he would begin to look at it. Has always thought the valuation was very rich. US expansion has not been as robust as they had hoped. But in Canada they are always finding places to open new outlets.

Good company and has been doing things very well recently and is fairly defensive. He would prefer McDonald’s (KO-N), which has a 35 year history of expanding successfully internationally. Also, has a bigger dividend yield and the lower PE multiple with greater growth prospects.

Reported a bit weaker traffic in Canada in the last quarter. Management cited weaker consumer spending. This is more of a defensive consumer stock. Unit growth opportunity is more in the US. Very good with menu innovations and bringing in higher priced items to increase average (?) size.

Dividend growth excellent over the last 5 years but it is not behaving like it should. It could be vulnerable. He would stay clear right now. He would like to see how the security participates on a good days. Wants better behavior before he participates again.

This company now trades at around 16X forward earnings and typically has traded around 18X. Have seen a little bit of a headwind because of slightly higher costs and slightly lower margins, which is a little bit of a concern. Technically looks good at around the $50.88 mark. Thinks they missed 2^nd quarter earnings due to less frequent transactions but actually more spend on each transaction.

Not cheap on an earnings basis but there are a lot of other companies that were never cheap. Believes that the growth potential for this company is not Canada, but the US (they are proving it with the numbers) and they are just getting started. If they can mimic what they did in Canada, there is so much more to grow in this stock. He looks at it on a 5-10 year basis. 1.7% dividend, which he thinks will continue to grow each and every year.

(A Top Pick Oct 12/11. Up 5.97%.) Wouldn’t recommend you buy more here. Has been selling a little bit. Has the potential to expand its US footprint and has been showing a bit of that. 1.7% dividend.

Not one of her favorites. It seems to have broken down a bit technically. Fundamentally the company seems to be hurting badly from McDonald’s, who have been extremely promotionally. Has PE multiple so if it misses on earnings it will really get whacked. Input costs are really going to be horrific and you are going to see price increases. Customers are not willing to take price increases in these companies (the whole space).

See his Top Pick which has a much cheaper multiple but with an actual a higher yield. For him to be interested in this company, it would have to be $46-$47.

Caller Sold a Sept 48 Put Option. When writing a Put Option, you are taking on an obligation to Buy a stock at a certain price. In this case, he is taking on an obligation to buy a stock at $48. Similar to buying a stock with a Limit Order on a normal stock purchase but this gives you a premium that you get to keep regardless whether you buy it or not. Not a bad way to enter a position.

This company has been wonderful at growing dividends and have been doing this at roughly 15% over the last 5 years. The negative is that there is a slowing in transaction growth causing share prices to back off. There is a big question around the consumer right now so you have to be a little bit careful in fact consumer driven space.