A Note to Prospective Restaurant Brand's Shareholders

There has been market talk in the past and more out today about how positive things look for Restaurant Brands [RBD.NZ] profit next year.

Yes, profit will be up marginally from last year and substantially from the last few years but this company really has had a dreadful past, so any increase in profit will look good.

I am not sure whether anyone follows this company closely in the broker/choker set but if they do they were either in nappies when the company listed back in 1997, too lazy to analyze the company's history properly, or ignoring the bleeding obvious simply because the stock will be back in the NZX 50 next week and brokers will have to add the stock to their index funds - read pump and dump.

While South African CEO Russel Creedy has done a much better job than any leader the company has had, he has gotten the company out of the fast food graveyard by focusing on cutting costs, speeding up service times and levels of service (my experience from gorging at KFC for the last 15 years and being a large RBD shareholder in the past) the industry that his company operates in is notoriously cyclical.

Fast food is currently undergoing a renaissance of sorts because of dire economic circumstances and people are looking for cheaper places to eat. RBD is now in the upper part of the fast food cycle, in fact I mentioned about ten years ago that its business cycle is up and down more than a cheap Krd hooker, anyway, that aside, my bet is that the stock may even race up to one and a half dollars or more from its current 1.02.




It has moved over the last couple of months ago from a low of 57c a stock price it last reached in the late 90s.

My point is if you are interested in buying into this stock, be warned that you should be there for the long-term because its stock price will come down again when it moves back off the peak of its economic cycle and once again struggles to maintain profit.

You have been warned dear readers but as always, do your own research.

Restaurant Brands @ Share Investor

Pizza Hut sell-off provides opportunities all-round
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


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Long VS Short : Auckland International Airport

In this eight installment of the Long vs Short series I am once again going to take look at the chart comparisons for a stock from the Share Investor Portfolio and compare the 10 year return (chart above) to the turmoil of the last year with a 1 year return chart (large chart at bottom of post).

In this series I want to show the merits of investing, using charts, for the long-term vs short term gains or losses. I will use the longest available data to me for the long-term view (10 years )and will make a comparison against the NZX50.

In this segment of Long vs Short I will take a look at Auckland International Airport Ltd [AIA.NZ] .

I currently hold 3000 Auckland Airport shares after buying 1000 of them in November 2006 and 2000 in April of this year. (see small chart below for detail)

My Portfolio
Symbol	Price	Value	Earned
AIA.NZ	$1.600	$4800	$-540
You own 3000 [AIA.NZ] shares purchased at $1.78 [$5340]

This stock has been performing well fundamentally over the last 10 years and steady over the last 12 months. Its share price though has been fluctuating wildly over the last few years. From a high of over $3.60 during a competing bid to seize control of the company in 2007-2008 to $1.54 recently.

If I had held this stock for the full 10 years (see large chart at top) my return would have been a whopping 210%-including dividends, tax credits and minus brokerage, the NZX is a gross index of stocks.

By comparison if I had held the stock for just this last year (see large chart below) my return would have been a loss of just over 35%.

My total return after 2.5 years or so of holding AIA stock is a loss of just under 10% (see small chart above) That is after dividends and tax credits are added and brokerage applied, not bad considering the market drubbing of every listed NZX share but there is an 8c gain from the 2000 shares I bought in April at $1.70 each.

Having said that this exercise proves, once again, that the long-term bet is the only one to take.

Long-term, 8 in this series, short term 0.





Long vs Short Series

Michael Hill International
Freightways Ltd
Pumpkin Patch Ltd
Fisher & Paykel Healthcare
Mainfreight Ltd
The Warehouse Group
Sky City Entertainment


Auckland International Airport @ Share Investor

Auckland Airport needs main focus on its core business
Marketwatch - Auckland International Airport
Why did you buy that stock: Auckland International Airport
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Discuss this stock @ Share Investor Forum


Related Links

AIA Financial Data

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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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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

Freightway's Capital Raising more of the same crap for small shareholders
Long VS Short: Freightways Ltd
Freightway's keeps delivering
Why did you but that stock: Freightways Ltd
Freightway's delivers
Freightway's packages up a good result


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
As recession bites Sky City bites back
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
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
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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