Restaurant Brands International (QSR-N)

Under the new CEO, this has returned 27% and shares are up 23% in the past month, but the increase hasn't come in a straight run. Choppy. There have been concerns of a weakening consumer and the effect of these hit weight-loss drugs. Their last quarter slightly beat sales growth but slightly worse same-store sale while unit growth slightly beat and earnings beat. A tepid report. Burger King has been their problem chain, lagging the others, falling short of sales estimates; all their growth is international and excellent (China, Mexico, Japan, France, etc. especially digital sales). He expects better numbers to come. Popeye's has done very well, beating estimates while their new menu items is driving momentum. Tom Horton's represents the largest part of their earnings and is making great progress for them. There's room to improve overall, therefore room for the stock to run.

Wendy's is his favourite in this space, but everyone goes to Chipotle. He prefers those.

Franchisees are battling the owner, and he sides with the franchisees. Management is squeezing the life out of franchisees. Same-store sales growth has tailed off. Innovating with all-day breakfasts hasn't taken off. International expansion make sense, but how successful will they be in China? He's on the sidelines.

You are looking at how fast Tim Horton's can grow. Their growth rate is starting to slow down a bit. Their brand does not translate that well outside of Canada. Then you have all the issues with franchisees.

They continuously grow the earnings. Executive turnover does raise a red flag. He would prefer a cleaner balance sheet and less of a debt load. He would look at it if had a good entry point, but right now there are better places to be.

The stock remains in a long-term uptrend since early-2016. Pulled back in mid-2018, saw some market fluctutations, but he sees no reason to reduce.

Franchise battles with the parent has created a lot of negativity around this stock, and so has recent short-selling. He needs the clouds to really clear from QSR before he consider this stock.

There is a change in the way people think about food. It has had a good run. Doesn't think it is going to go much higher from here. There is a real change in the way people think about food, especially in the US. What may be saving them is that prices on a lot of their input products, other than beef, have gone down. This will help them in the next couple of quarters, but in the end, this is the issue, they’re going to have to face.

They are doing the tax inversion/THI-T acquisition because they are not seeing the growth. The guys who run it are bright and cost effective. Tim Horton’s is a strong franchise in this country, but he does not see it growing in the US. He would sell THI-T now.

History tells him that maybe you don’t want to own this instead of Tim Hortons because there may not be any synergies going forward because the companies are too different. He would take money off the table if he owned Tim Hortons.