Pizza Hut sell-off provides opportunities all-round

The finalisation of details yesterday of a decision made last year by Restaurant Brands [RBD.NZ] to ditch their company owned Pizza Hut restaurants and flog them off to owner/operators brings to an end the long running saga of this money losing brand in RBD's stable of 3 - KFC & Starbucks being the two others - brands.

For many years Pizza Hut has dragged down the company bottom line while KFC has struggled at times to hold up the whole company - Starbucks has also been a money loser since its introduction in 1999.

Many of my readers will know that I was a early shareholder of RBD and actively pushing management back in 1998 to ditch Pizza Hut and sell them to owner operators as that was how their competition was kicking Pizza Hut's backside.

Better late than never!

This latest development will be good for RBD shareholders. Not only will RBD get one-off money for selling Pizza Hut stores but they will also get ongoing management fees for each store that is sold-a sub franchisor of sorts, as YUM! still remains the big daddy franchisor.

All Restaurant Brands shareholders need is the double -Starbucks to be sold off - and the company will be much more able to withstand the highly competitive fast food market with KFC as the big star.

Of course the Pizza Hut sell off provides a good opportunity for individuals to buy a run down business and develop it into a good one.

A franchised pizza business like Pizza Hut, if run well, is a great way to make money.

Domino's Pizza owners in New Zealand have done this well over the years and this has left Pizza Hut as the also ran after being the dominant pizza force in New Zealand for years.

If you have a couple of hundred thousand free cash and access to debt you might well want to give RBD a call right now.


Restaurant Brands @ Share Investor

Danny Diab & Restaurant Brands
2008-2009 KFC sales figures mislead investors
KFC Finally Flying
Starbuck's New Zealand Cup doesn't runneth over
RBD gives KFC a push
McDonald's playing chicken with KFC
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
RBD saga continues: CEO leaves
The secret recipe is out
2007 FY profit analysis
Delivering increased profit in October 2007
No reason for optimism in latest sales figures

Discuss Restaurant Brands @ Share Investor Forum


Fast Food, Fast Track: Immigrants, Big Business, And The American Dream by Jennifer Parker Talwar
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c Share Investor 2009

Market Watch: Sky City Entertainment/Freightways Ltd

Interesting that both Sky City Entertainment Group [SKC.NZ] and Freightways Ltd [FRE.NZ] respective share prices are both approaching the price at which their recent capital raisings were issued at.

Lets have a wee look at Sky City first.

Today the stock closed at NZ$2.62 (see 2 month SKC chart below) just 1c above the $2.61 Share Purchase Plan (SPP) price, a purchase plan that I participated in just a month ago.

At the time I moaned and bitched that my current Sky City shareholding was going to be diluted, only getting just shy of 2000 shares in the offer. I had a feeling that the share price was going to take a dip because of economic circumstances (gee I am a genius), so I am going to take the opportunity to grab a few more thousand shares to top up my holding to 40000 or more .

Naturally I am very pleased about this turn of events in the market.

Likewise Freightways. I got gypped there too, and will be looking for at least another 1000 more shares to top up my holding to 10000. The current share price is $2.84 as of market close today so there is still another 40c to go before it will trigger a buy at the SPP of $2.44 but if you look at the Freightway's 2 month chart below you will see, like Sky City, the share price trajectory is in a downwards direction, so is possible that my buy price will be reached.



Time to put some cashflow to good use.


Freightways @ Share Investor

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Why did you but that stock: Freightways Ltd
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Discuss this company @ Share Investor Forum


Sky City @ Share Investor

Sky City share offer confusing and unfair for small shareholders
Sky City CEO doubles down
Sky City Entertainment 2009 Interim Profit Review
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
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Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
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New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Discuss this company @ Share Investor Forum


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Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage by Mary Buffett
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c Share Investor 2009

Stock of the Week: Burger Fuel Worldwide

This Stock of the Week will be a surprise to many because I have been very critical of this company since its IPO listing in July 2007. Burger Fuel Worldwide [BFW.NZ], the "gourmet" burger franchisor company that collects royalties off franchisees as a means of revenue -but currently derives more than half its revenue from food and beverage sales at two company owned stores-and has limped from a failed, over-priced IPO and incurred big but dwindling losses along the way.

Its cash reserves are almost exhausted and its stated reason for their IPO, attracting more franchisees to gain revenue growth for the franchisor, has come to a grinding halt because of "capital restraints".

All negative so far, but wait there's more! Some positive stuff!

There is a chance that Burger Fuel, management could pull things off sometime in the future and make a good sustained profit.

One of the reasons I picked this stock was its share price. It is getting close but not yet at, its true value. At 32c it is roughly a third of its $1 IPO price. There is little interest in and few buyers lined up as at market close on Friday 19, with the first cab off the rank offering 10c a share and the lowest 1c - the lowest ever bids for this stock, so a clear opportunity exists.

Burger Fuel isn't one of those solid stocks you would buy and not expect to lose money, it is purely speculative and high risk but if you have, like me , been watching the trials and tribulations of this company over the last 2 years, and thinking about buying some, now would be the opportune time to start thinking about it.

Anything less than 15c would be a good starting point.

Good luck!


Stock of the Week Series

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Burger Fuel Worldwide @ Share Investor


Burgerfuel: Dubai Marketing Hype
Burger Fuel 2010 Full Year Profit Analysis
Burger Fuel 2010 Full Year Profit Preview
Burger Fuel Worldwide: 2009 Half Year profit analysis
Stock of the Week: Burger Fuel Worldwide
Download full company analysis from Thomson First-Call
Burger Fuel doesn't rule out capital raising
Burger Fuel Worldwide: Closer look at Company Accounts
Analysis - Burger Fuel Worldwide: FY profit to 31/03/09
Burger Fuel: Running on Empty
Burger Fuel leaves investors hungry
Burger Fuel management cagey over company progress
Burger Fuel cooks up Dubai deal
NZX share trades with strings attached
Don't buy Burger Fuel, yet
Burger Fuel: Inside info?
Burger Fool IPO: Burger Fool?
Exclusive Interview with Burger Fuel's Josef Roberts
Burger Fuel's Daytime drama
Burger Fuel share price out of gas
Beefing up store numbers
Director explains share price drop
Burger Fuel slims down in value
Burger Fuel and Coke
Marketing Burger Fuel's future
Pumpkin Patch VS Burger Fuel
Burger Fuel results and commentary

Discuss BFW @ Share Investor Forum - Register free





c Share Investor 2009

Sir Robert Jones in his Autumn of Content

I am a contrarian investor of sorts. I say this because while I am buying stocks right now and looking at buying more, I also bought them while the market was at a higher level.

I have written about a couple over the last week, Michael hill and Doris Mousdale, and there are a couple of other New Zealand notables, Jan Cameron and Bricoe Group's [BGR.NZ], Rod Duke who are contrarians by nature.

Perhaps one of the worlds most famous contrarian investors is the world's richest man, Warren Buffett - he loves the current market turmoil, proclaiming such gems that he feels like a "Kid in a candy store" or a "Teenager in a whorehouse", when it comes to the prices he is paying for beaten down assets.

New Zealand has its own Waren Buffett in Sir Robert Jones.

He is as happy as a tar baby in a sandpit because the property tycoon has been buying property when everyone else is selling - NZ$100 million of deals done so far this year.

Some prescient quotes to a recent audience of property professionals show just how excited Sir Bob is:

"From a self- interest point of view, we look forward to a recession."

"We are not going broke. We buy buildings and those buildings are cheaper."

"Land developers go broke, building developers go broke, and for very good reasons, but they're too dumb to work it out for themselves."

"Why do banks keep financing them? Because the bankers get younger every year."

"I've survived more property cycles than most of you, so where's property going? Nowhere - property doesn't move."

You cannot get a more experienced commercial property man in Australasia than Sir Bob, as he points out he has seen this all before and no doubt capitalised on the troughs.

I recall him selling a large office block during one the boom times only to buy the same block back years latter for a much lower price - from memory it was a building in the 1980's Chase development, the full city block the "Finance Centre" in Auckland.

Sir Bob likens the economic cycles to the four seasons, with Winter the low point and Summer the high. He reckons we are in the Autumn of this cycle.

I think he is right and there is worse to come before it gets better but he certainly is making his autumn/early winter one of content rather than the alternative.

You should too if you have the cash.


Related Links

Listener Sir Bob Interview


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c Share Investor 2009