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Arcos Dorados Holdings, Inc. Message Board

  • kevin_f_1999 kevin_f_1999 Apr 20, 2011 6:11 PM Flag

    I think a few people on here have never been to a McDonalds in Latin America

    I was desparate to get into this but I was terrified when I saw that it has a PE of 50+. After that I found that it's earnings have gone down for three consecutive years. I will get in someday but I am no longer so anxious. Also, I spend about two months a year in Mexico and I caution that the quality control of McDonalds in Latin America that I have seen is not the same as in the United States. My niece used to work at a What-a-Burger in Guadalajara which was changed to a McDonalds and everyone I know liked it better before the change. Also, it is wrong to assume that people, at least in Mexico, will flock to McDonalds just because they worship American brand names. They are not as naive as we imagine and I can honestly say that my aunt lives two blocks from a McDonalds and she has probably never stepped foot in it in her life. Why would she when they have the absolute awesomest tacos in the world one block away all night long for ten pesos a piece. Having said all of this I think this is an awesome stock in the long term and I WILL buy it, but I also think that it was more than fully valued, based on PE, growth, and equity at the original target price of 13 dollars a share. Remember seven to ten million shares a day is not small time investors that buy with passion and nostalgia. These are ETF funds and mutual funds managers that have no emotional ties to stocks. At some point they will have made their money and they will sell on fundamentals, with no emotional attachement at all. Hopefully, because that is when I hope to buy.

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    • Gracias por la informaci├│n. I'm considering buying Arco, just not sure yet what the right entry point would be.

    • i usnderstand your concern, but keep in mind there are around 2200 arco restaurants and they are not only in mexico. if fact, from what ive seen, brazil has the most. (OLYMPICS ARE COMING). its also hard to find speedy growth with a low P/E

      • 1 Reply to caseyhospital
      • I also looked at the PE.

        When compared to MCD it is high, however, the growth for their 1775 restaurants are going to be much higher than MCD's footprint.

        Also, ARCO will be reinvesting $$$ in existing renovation and in expanding.


        Would love to buy at the MCD PE, but realize their opportunity really will demand a PE closer to CMG.

        I bought my position at 22 and am holding as ARCO growth will recover any PE mistake i "may" have made.

        Good Luck Longs.

    • I like kevin's viewpoint, even though he only considers Mexico. Don't know what Bazil will add to the equation. I can be patient and wait for a pullback to 20 or so.

    • Oh God...ur such a complete moron I can't even comment any further.

      Please do your research before posting ignorant comments.

      I realize that being ignorant probably makes you feel more important and smarter than all others. This just because you're too stupid to understand your own shortcomings. For this reason i sympathize and wish you good luck.

      I will say a prayer for you.

    • Well idiot...i am an "investor"....not a zip trader like you.

      My employment history includes having owned and sold a 25 restaurant chain, sold, retired at a young enough age to reinvest in a manufacturing company over 12 yrs ago currently with over 300 employees.

      I hold an Accounting Degree, Law Degree, and an MBA in Finance.

      I currently hold 20K shrs of ARCO as a LT hold, and short of 5K shrs in an IRA account.

      I invest, which means not being concerned with a buck up or down, but keeping focused on the big picture.

      I have more academic, personal skills, and experience in the business world and in investing than you could ever imagine.

      There are many others, some on this board, that are far superior to myself in skills, experience, and personal wealth.

      You are not one of them.

    • I can't find a single valid point to your post.

      Restaurants in Mexico are dirtier than in USA. Consumers don't expect the same level of quality. ARCO is using proceeds of IPO in part to clean restaurants.

      ARCO is a Franchisee, we ALL know that. They do pay a franchise fee. The Franchise fee is variable, not a fixed debt obligation, that is a percentage of sales.

      ARCO has been in growth mode, will continue to be using proceeds of IPO. Earnings are used for growth, therefore don't always come out in the form of EPS when a Company is in early stages of Growth.

      Tacos down the street in Mexico may be very tasty to some, however, ARCO/Mcdonalds growth in Latin America are obviously tastier as we've seen their sales grow to over $3B.

      What's ur point exactly?

      Dear God ur annoying.

    • Earnings realease is on May 5th and I anticipate a large swing one way or another on that day. If it is bad I will buy it, if it is good I will be excited and eventually buy it anyway, just waiting for a couple of dividend payments in May. IRA's really make you wait around sometimes because you can't just go down and add more to the account in order to buy something.

    • Well ignorant, moronic, idiot, I have a bachelor's degree in Economics and in American Literature. I graduated with honors from college and have a master's degree in Education. I have bought eight houses that I now rent out in Mexico and was a self made millionare by 35. I now teach to keep occupied. If I were to retire I would not open a business. That is not retirement. I would sit on the beach in Mexico and laugh at you. I bought Telefonos de Mexico in the early 1990's before you even knew what a BRIC was. I think that you are stupid to buy 20000 shares of anything. I have seen way too many companies die. There are so many wonderful companies around the world to choose from, why would you limit yourself. And your personal skills are not reflected in you behavior. You think that you are smarter, richer and more brilliant than everyone else in the world. You are probably not right. You are just an angry conceited old man with too much time on his hands. Anyway when I buy a stock I rarely if ever sell it and I never short stocks. I am an eternal optimist.

    • I am from India and when MCD was entering India a few years ago, people were very negative about their chances against the local players coz Indians prefer first to eat at home or a typical indian meal out. But look at what MCD has achieved in the few years here. There is hardly any space at any of their fast growing outlets and youngsters queue up to get their favourite burger.

    • you have made a lot of sense. new ipo with little money to start with is at $22.00. the only one i hold that does not pay a dividend was from noc's spin off. good luck to all of you that love this. not for me just now.

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