Imvescor Restaurant Group (IRG-T)

(A Top Pick February 15, 2017. Up 23%). In the takeover, shareholders were given the choice of cash or stock in MTY. He took the cash. He doesn’t like the company’s positioning (focused more on food court concepts) as much as Invescor (casual dining). Also, the increase in minimum wage across Canada is having a large impact on the costs of restaurants.

(A Past Top Pick Jul 14/16, Up 49%) They brought in new management during a turnaround and they executed extraordinarily well. He has been pleased and sill owns it.

(A Top Pick Sept 16/16. Up 20%.) Runs a chain of different restaurants. Hired a new CEO about a year ago, who changed the decor of the restaurants and redid the menu. Has just added more to his holdings. It has a lot of runway.

(Top Pick Apr 8/16, Up 32.96%) It has participation in a wide variety of restaurants. This is not an entry point. There are higher growth possibilities in the market right now.

(A Top Pick Sept 16/16. Up 9.88%.) Pizza Delight, Score and Baton Rouge, etc. restaurants. This has new management, and they revamped the menu and renovated the restaurants. Good returns.

This is in the restaurant business out East. He met them and it looked like they were revamping a lot of the restaurants and that the margins increased. It looks like they have done a good job.

Their brands include Pizza Delight, Baton Rouge, Scores, etc. Mainly in Québec. Recently made an acquisition of a breakfast chain, Ben & Florentine. They don’t actually own or run the expenses of the restaurant, but take a royalty off the top line. There is a lot of free cash flow. Trades at half the valuation of a Freshii. Dividend yield of 2.69%. The new CEO has been reinvesting in the business. They are on the hunt for more acquisitions. A cheaper way to play the restaurant business in Canada. (Analysts’ price target is $3.88.)

Operates restaurants such as Baton Rouge, Pizza Delight and Scores across Canada. They brought in new management a couple of years back to turn the business around and the stock has been doing well. Both their top line and bottom lines seem to be continuing on apace.

She thinks it is a great company and is a core holding. There are a lot of good catalysts. They were a group of fast serve restaurants in Quebec put together by a banking group that did not know restaurants and who then brought in experts, remodeled stores and got the business back on track. They had a nice same store pickup. They are now looking at making acquisitions in that area. The valuation is well below other restaurant peers across North America. She thinks there is plenty of upside remaining.

Operates 227 restaurants such as Baton Rouge, Pizza Delight, Scores and Trattoria di Mikes brands, the bulk of which are franchised. This is a turnaround story. They had new management in 2014, where they were looking to rebrand and redevelop the restaurants that they already had. So far the experience has been working and they have had strong top line growth and strong bottom line growth. Dividend yield of 2.91%.

Operates a whole bunch of restaurant franchises, including Baton Rouge and Pizza Delight. They have about 220 restaurants throughout Ontario, Québec and Atlantic Canada. In 2014 they got a new CEO, who encouraged the franchisees to revamp their restaurants, put out new menus and new items on the menus. Traffic has been recovering very, very well. This is in the early innings of getting franchises. Good revenue growth and is a very cheap valuation in the restaurant sphere.

Interesting turnaround story. It has been turning around since 2014. They have incentivized the franchisees to maintain the restaurants in the highest possible quality. They brought a new guy in after it didn’t work. It takes a while for a new CE to affect all the changes he wants but it SEEMS it is working already.

One of the largest restaurant franchisors in Canada. They own 225 locations, mainly in Québec and Atlantic Canada. Low CapX and high free cash flow. Pays a 3.5% dividend yield. CEO is just in the early stages of a fairly significant turnaround. They are reinvesting in the restaurants and having the franchisees renovate, improving menus, improving food quality, etc.

(Market Call Minute.) Management isn’t too thrilled about buying stock back at these levels. The street is building in a lot of things that might not actually happen.

Some of the names they hold are Baton Rouge, Pizza Delight, Scores and Trattoria di Mikes, which operate right across Canada, but particularly in the East. He likes the food business. The new CEO seems to be turning the company around. A strong franchise model and profitability has been there in the last while. Dividend yield of 3.36%.