QSR - Restaurant Brands International Inc.
| Previous Close | 63.78 |
| Open | 63.86 |
| Bid | 63.87 x 1200 |
| Ask | 63.96 x 900 |
| Day's Range | 63.78 - 64.36 |
| 52 Week Range | 50.20 - 65.59 |
| Volume | 591,378 |
| Avg. Volume | 1,760,114 |
| Market Cap | 29.321B |
| Beta (3Y Monthly) | 1.18 |
| PE Ratio (TTM) | 26.44 |
| EPS (TTM) | 2.42 |
| Earnings Date | N/A |
| Forward Dividend & Yield | 2.00 (3.15%) |
| Ex-Dividend Date | 2019-03-14 |
| 1y Target Est | 70.50 |
- Yahoo Finance Video•4 hours ago
McDonald’s to acquire Dynamic Yield in move to personalize the drive-thru
McDonald’s is betting big on big data. The fast-food giant is spending $300 million to acquire tech platform Dynamic Yield in a move to personalize customers’ drive-thru experience. Yahoo Finance’s Dan Roberts, Melody Hahm, Myles Udland, and Brian Sozzi talk about McDonald’s largest acquisition in 20 years.
- CNBC Videos•5 days ago
Restaurant Brands' Jose Cil on Burger King's new coffee s...
Restaurant Brands new CEO Jose Cil speaks with CNBC's "Squawk on the Street" about his outlook on Burger King, his company's biggest brand, and its new coffee subscription service.
- Investopedia•3 hours ago
McDonald’s vs. Burger King: What's the Difference?
Like PepsiCo, Inc., versus the Coca-Cola Company or Ford Motor Company versus General Motors Company, the battle between McDonald's Corporation (NYSE: MCD) and Burger King represents one of the most iconic and important business rivalries in American history. For more than 60 years, McDonald's has been the trailblazer that set the standard by which all other franchises operate.
- Motley Fool•4 hours ago
Burger King's New $5 Coffee Subscription Misses Opportunity to Score Big
A small cup of coffee isn't going to convince anyone to switch.
- Zacks•yesterday
Papa John's Stock Up on Appointment of O' Neal as Ambassador
In order to revive the fallen brand image, Papa John's (PZZA) is expanding the board and looking for new investors.
Yahoo Finance•5 days agoBurger King and Popeyes have a stealth digital-delivery business: CEO
Restaurant Brands International CEO Jose Cil chats with Yahoo Finance about the future of Popeyes, Burger King and Tim Horton's.
- InvestorPlace•5 days ago
Domino’s Pizza Stock Looks Too Cheap
Stocks like Domino's Pizza (NYSE:DPZ) don't go on sale very often. But to some investors, "on sale" might be an exaggeration.Source: Shutterstock Domino's Pizza stock, even after its recent selloff, is hardly cheap. Indeed, DPZ stock still trades at over 22 tines analysts' consensus earnings per share estimate. * 10 Stocks on the Rise Heading Into the Second Quarter That's a huge multiple for a relatively mature company. And given that DPZ stock has tanked lately in part due to its big Q4 earnings miss last month, it's a multiple that might not seem all that attractive.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut DPZ has plenty of room to grow into that multiple. Between the company's same-store-sales growth and the new stores it will open, its revenue should continue to increase nicely for years to come. Given its franchise model and the leverage on its balance sheet, its higher revenues will have an amplified effect on its earnings.DPZ is still facing risks. But those risks seem manageable, as Domino's is well-positioned to handle any challenges ahead. DPZ stock isn't cheap, but stocks like this shouldn't be, and they very rarely are. The Case for DPZ StockDPZ simply has come to dominate the pizza business. Yum! Brands' (NYSE:YUM) Pizza Hut's growth has stalled out in recent years. Papa John's (NASDAQ:PZZA) sales are collapsing. Yet Domino's keeps growing at impressive rates.Indeed, during the company's "disappointing" Q4, its U.S. same-store sales rose 5.6% year-over-year. Meanwhile, Pizza Hut's comparable-store sales were unchanged. Papa John's comps fell 8%. McDonald's (NYSE:MCD) same-store sales rose 2.3% in Q4, and most investors thought its results were good.No major chain's same-store sales are increasing as rapidly as those of DPZ. No major chain, in fact, is coming close. That trend should continue, and Domino's can benefit from opening new stores, as well.It's adding stores to U.S. metro areas. That's been a successful strategy despite fears that new stores might "cannibalize" existing stores. The company's overseas business continues to grow, in terms of both comparable stores and new opportunities.DPZ still expects its annual retail sales to rise 8%-12% over the next few years, with its global comparable sales increasing 3%-6% and its net store count rising 6%-8% annually. On the other hand, 8%-12% growth might not sound like much, since DPZ stock has a trailing-twelve month P/E ratio of 29.But because of DPZ's franchise model, 8%-12% revenue growth results in earnings and cash-flow growth that's much higher than that. Store-level costs are borne by franchisees, enabling DPZ's operating margins to rise faster than its revenue. And the leverage on Domino's balance sheet further boosts its net margins. For 2020, for instance, analysts' consensus estimate calls for a 9.8% increase in sales and an 18% increase in EPS. The Risks and Rewards of DPZ StockThe company's 8%-12% revenue-growth guidance, then, suggests that its earnings easily could increase 100% or more over the next four or five years. Even assuming that the P/E ratio of DPZ stock drops in several years as DPZ matures, investors will still have an easy path to double-digit annual returns, including dividends. Any outperformance - or a continued willingness by investors to pay up for DPZ stock - sets up a path for DPZ to reach $500 and beyond.But there are risks facing DPZ stock. The most obvious one is the potential for recession in the U.S. or in key international markets. Domino's struggled during the financial crisis: its same-store sales declined 4.9% in 2008. But it clearly has a better business ten years later, and its emphasis on low price points could mitigate the macro pressures on it, particularly domestically.There are two smaller concerns. The first is that on the whole there's much more competition in the pizza industry than ever before. The rise of online ordering services like GrubHub (NYSE:GRUB) and DoorDash has allowed thousands of restaurants to offer delivery services, breaking pizza's traditional dominance of that space. In turn, other chains now offer delivery, including casual dining giants like Brinker International (NYSE:EAT) and Dine Brands Global (NYSE:DIN).But as that trend has accelerated lately, Domino's sales don't appear to have suffered. The company's comp-sales growth has decelerated from 12% in 2015 to 6% in 2018. That's not necessarily a surprise, however, given the tougher competition. But 6% still is more than enough growth to leverage expense growth and expand margins. And it hardly suggests that the company's business model is facing an existential threat. The Best FranchiserThe final risk is one facing the entire industry. Companies like McDonald's and Burger King owner Restaurant Brands International (NYSE:QSR) have benefited from franchising more restaurants. That's benefited MCD stock, in particular, as rising labor and food costs become the problem of the franchisees , not that of the corporate parent.But as James Brumley pointed out last year, at some point franchisees won't be able to handle that pressure any more. Carrols Restaurant Group (NASDAQ:TAST), the largest Burger King franchisee, shows the problem. Over the past three years, QSR stock is up 63%, but TAST has declined by almost 25% during the same period.Domino's franchisees, however, are doing quite well. The company pointed out in a recent investor presentation that its franchisees' average EBITDA per store has soared in the past decade, rising from $49 million in 2008 to over $137 million in 2018. Franchise-level profits have stopped increasing lately, but they're still positive, and franchisees' margins still look quite healthy.So, purely from a business standpoint, Domino's looks like far and away the best pick among restaurant stocks. It has more opportunities to open additional stores than its large peers. DPZ can still take plenty of market share from its corporate rivals (and independent pizzerias). Its franchisees are happy. Since Domino's is doing an awful lot right at the moment, the owners of Domino's stock have little to complain about.Given DPZ's growth potential, DPZ stock is worth paying up for. With Domino's Pizza stock now 15% cheaper than it was just a few weeks ago, the shares may be expensive, but they're still attractive.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Specialty Retail ETFs to Buy the Industry's Disruption * 5 Stocks To Buy for the Happiest Employees * 3 Out-of-Favor Consumer Stocks to Buy Compare Brokers The post Domino's Pizza Stock Looks Too Cheap appeared first on InvestorPlace.
- CNBC•5 days ago
Restaurant Brands CEO: Burger King's $5 coffee subscription will help it win the breakfast wars
For Burger King, its new $5 monthly coffee subscription is a way to get customers into their stores in the morning to check out their other breakfast offerings, Restaurant Brands CEO Jose Cil said.
- Moody's•5 days ago
Carrols Restaurant Group, Inc. -- Moody's assigns B2 CFR to Carrols Holdco Inc., rates proposed bank facilities B2
Moody's Investors Service ("Moody's") today assigned Carrols Holdco Inc. ("Carrols") a B2 Corporate Family Rating ("CFR"), B2-PD Probability of Default rating, and SGL-2 Speculative Grade Liquidity Rating ("SGL"). Proceeds from the proposed $400 million senior secured term loan B, along with common and preferred equity totaling approximately $138.5 million, will be used to acquire 166 Burger Kings and 55 Popeyes Louisiana Kitchen ("Popeyes") restaurants through a merger with Cambridge Franchise Holdings, LLC ("Cambridge"), redeem Carrols Restaurant Group, Inc.'s existing $275 million 8% senior secured 2nd lien notes due 2022, as well as pay related premiums, fees and expenses. "The assigned B2 CFR reflects the company's solid earnings and credit metrics that will continue to strengthen as management focuses on driving sales, continues development and acquisitions, and manages costs," stated Adam McLaren, Moody's Analyst.
CNW Group•6 days agoRestaurant Brands International Inc. Announces Participation at Upcoming Investor Conference
Restaurant Brands International Inc. Announces Participation at Upcoming Investor Conference
- Market Realist•6 days ago
Wendy’s Stock Falls after Mizuho Downgrade
Mizuho Downgrades Wendy’s from 'Buy' to 'Neutral'(Continued from Prior Part)Stock performance The Mizuho downgrade appears to have led a fall in Wendy’s (WEN) stock price. Today, at 10:30 AM EST, the company was trading ~1.2% lower from its
- Market Realist•6 days ago
Mizuho Downgrades Wendy’s from ‘Buy’ to ‘Neutral’
Mizuho Downgrades Wendy’s from 'Buy' to 'Neutral'Wendy’s downgradeMizuho downgraded Wendy’s (WEN) from “buy” to “neutral” today and also lowered its 12-month price target from $20 to $18. The new price target implies an upside
- Skift Table•6 days ago
Restaurant Brands International, Explained
Skift Table Brand Explainers break down restaurant groups by their individual brands in order to better understand their respective parts as well as opportunities for groups to expand or consolidate. Restaurant Brands International, as an entity, has only existed for roughly the past five years. The company was formed after Burger King merged with Tim […]
- Motley Fool•9 days ago
Will Burger King's $5 Coffee Trick Hurt Starbucks and McDonald's?
The BK Cafe Coffee subscription could drive business away from rival morning haunts.
- InvestorPlace•11 days ago
3 Best Restaurant Stocks Morgan Stanley Says to Take a Bite Of
U.S. same-restaurant sales dipped into negative territory in February for the first time in nine months. A potentially softening U.S. restaurant environment suggests investors need to be even more selective when it comes to choosing restaurant stocks. Morgan Stanley analyst John Glass recently said investors should focus their attention on fast food stocks in 2019. * 15 Stocks That May Be Hurt by This Year's Big IPOs Here's a look at his top three favorite restaurant stocks to buy.InvestorPlace - Stock Market News, Stock Advice & Trading Tips McDonalds (MCD)Source: Shutterstock The past decade hasn't all been smooth sailing for McDonald's (NYSE: MCD) or its investors. However, Glass says the Golden Arches are still the gold standard of restaurant stocks: "U.S. sales will outpace peers in '19 and should accelerate as the year progresses as benefits from a comprehensive re-imaging plan become more visible."McDonald's has made an aggressive push toward its Experience of the Future initiative in recent years. This initiative emphasizes mobile ordering, delivery and pickup options, store remodels and in-store kiosks.Glass says heavy investments likely clouded McDonald's numbers in 2018. The market doesn't seem to appreciate how much these under-the-radar improvements could improve business efficiency in coming years.In the near term, focus on value offerings and local advertising in 2019 should support same-store sales numbers. Glass predicts return on invested capital will soon hit new highs as McDonald's reaps the rewards of its investments. In addition, he says earnings will get a boost from declining capital expenditures starting in 2020.Finally, in an increasingly unpredictable market environment, MCD stock offers investors value, stability and an attractive 2.5% dividend yield. Morgan Stanley has an "overweight" rating and $210 price target for MCD stock. Restaurant Brands International (QSR)Source: Shutterstock Restaurant Brands International (NYSE: QSR) is the parent company of Burger King, Popeyes and Tim Hortons. Glass says there is a huge disconnect between QSR stock valuation and the company's impressive growth numbers. Fundamentals at Tim Horton's seem to be improving, including same-restaurant sales growth of 2.4% in the most recent quarter. Burger King's SRS growth dropped from 10.1% in 2017 to just 8.9% in 2018, but it still outpaced most of its peer group. Popeyes stole the show for QSR stock investors last year. SRS growth jumped from 5.1% in 2017 to 8.9% in 2018.Glass said that after a big year in 2018, investors can expect more big numbers for this restaurant stock in 2019."Catalysts include improving margins at Tim's, better visibility on international expansion and economics, and increased investor outreach to help broaden the shareholder base."From a valuation perspective, QSR stock is trading at a free cash flow yield of roughly 7% based on Morgan Stanley's 2020 cash flow estimates. Glass points out that makes QSR a rare value among restaurant stocks. * 15 Stocks Sitting on Huge Piles of Cash Morgan Stanley has an "outperform" rating and $70 price target for QSR stock. Chipotle Mexican Grill (CMG)Source: Shutterstock Chipotle Mexican Grill (NYSE: CMG) has been a battleground stock for several years now. The company's growth story was derailed back in 2015 following a series of food safety scares. However, CMG stock has nearly doubled in the past year on optimism that new CEO Brian Niccol can replicate his past success as head of Taco Bell. Glass says Chipotle is a perfect early-stage turnaround opportunity for investors. Niccol and the management team are pushing hard on several initiatives, focusing on throughput, advertising, menu improvements, digital ordering and customer loyalty. Early returns on the initiatives have been positive, but 2019 will certainly be a show-me year for Chipotle.Because Chipotle's restaurants are company owned and not franchised, the company may face unique margin pressures compared to its franchised peers. Rising wages will certainly take a bite out of Chipotle's bottom line. However, Glass said investors should be watching traffic as a key indicator that Chipotle's outlook is improving. In the fourth quarter, Chipotle reported 6.1%t SRS growth, double-digit revenue growth and a 2% increase in total transactions.As long as the recovery keeps trending in the right direction, Glass said long-term margins could eventually improve from around 18.7% to 21%. Morgan Stanley has an "overweight" rating and $617 price target for this restaurant stock.As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities.Compare Brokers The post 3 Best Restaurant Stocks Morgan Stanley Says to Take a Bite Of appeared first on InvestorPlace.
- InvestorPlace•11 days ago
Will Increased Competition in China Affect Starbucks Stock?
Starbucks (NASDAQ:SBUX) is facing increased competition in its extremely important Chinese market. That's got owners of Starbucks stock worried. Source: StarbucksInvestorPlace - Stock Market News, Stock Advice & Trading TipsBut the owners of Starbucks stock shouldn't be worried because the increased competition suggests that the Chinese coffee market is becoming healthier. * 15 Stocks That May Be Hurt by This Year's Big IPOs The Chinese Coffee Market Is HotIt is so hot at the moment that the chairman of Luckin Coffee, which only launched in October 2017, has reportedly demanded a $200 million loan from investment banks interested in getting a seat at the table if and when the company goes public. Expected to have 4,500 locations open across China by the end of 2019, Luckin Chairman Lu Zhengyao is severely testing the patience of investment banks. Luckin began working on its IPO in late January. By the end of February, it had hired Credit Suisse (NYSE:CS) as one of the banks to take it public; Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) are both advising Luckin, but have yet to be granted a formal role, making them susceptible to the $200 million shakedown. Who Is Luckin Coffee?Based in Beijing, the homegrown brand has opened 2,000 locations over the past 18 months in 22 Chinese cities. It plans to open another 2,500 in 2019, bringing the total number of cities where it has locations to 40 and making it the largest coffee chain nationwide in terms of stores open and the number of cups of coffee served. By comparison, SBUX has 3,600 stores in more than 150 cities, is increasing the number of stores it opens by almost 20% a quarter, and generally has locations that are significantly bigger than Luckin's stores. Luckin's business has little to do with the customer experience and everything to do with low prices, discounting through two-for-one offers, and speedy delivery and takeout. For example, a coffee costs $3 at Luckin, 50 cents cheaper than at Starbucks. Take that to the next level with a two-for-one deal, and the price for a cup of joe drops to $1.50. It's the dollar store of coffee. Luckin is looking to go public with a valuation around $3 billion, putting it on par with Starbucks stock, despite losing $120 million in 2018.It plans to list on the NYSE, in part because the Hong Kong Stock Exchange requires companies that list on it to have three years of operating history. There Is Other CompetitionSBUX is well-aware of the competition in the Chinese market. Iconic Canadian coffee brand Tim Hortons, owned by Restaurant Brands International (NYSE:QSR), which also owns Burger King and Popeyes, opened its first store in China at the end of February. Hortons has big plans for China. In 2019, it will open 10-20 stores in Shanghai, hoping to become the preferred brand for consumers looking for more than just coffee from their visit. It's not going to be easy, since Costa Coffee, and Dunkin' Brands (NASDAQ:DNKN) also are competing for customers in a country in which just 33% of the population bought a cup of coffee in 2017. "Tim Hortons will need to offer not just something unique that Chinese consumers can't find at other chains, but also spend heavily on marketing to build awareness of the brand," said Jason Yu, Shanghai-based general manager of Kantar Worldpanel in Greater China.Starbucks has been in China since 1999. It's earned the right to call itself the country's preferred coffee destination. Over the long-term, SBUX believes it will have more stores in China than it does in the U.S., where it has more than 14,000 stores. The Bottom Line on Starbucks StockGood businesses don't fear competition; they embrace it. As coffee becomes more accepted in China, there is going to be room for many competitors, including Luckin. The owners of Starbucks stock ought to happy about the increased competition. It's a sign the coffee market is maturing and expanding in China, which ultimately should significantly boost the company's overall profits. lifting Starbucks stock. Starbucks stock, in my opinion, remains a buy. As of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dividend Stocks to Buy Today * 7 ETFs to Buy to Ride the Longevity Economy * 7 Winning High-Yield Dividend Stocks With Payouts Over 5% Compare Brokers The post Will Increased Competition in China Affect Starbucks Stock? appeared first on InvestorPlace.
- Business Wire•11 days ago
BURGER KING® Restaurants Launches BK® Café Subscription for Only $5 a Month
For the price of a large cappuccino from Starbucks, you can have a BK® Café brewed coffee every day for a month
- Skift Table•12 days ago
Popeyes Shuffles Executive Ranks
Restaurant Brands International (RBI) announced today that Alexandre Santoro, the president of Popeyes Louisiana Kitchen since March 2017, would be stepping down from his position. Felipe Athayde, a longtime RBI executive who has previously worked with the company’s two other brands, Burger King and Tim Hortons, will be filling Santoro’s old role as brand president […]
- Zacks•13 days ago
Restaurant Brands (QSR) Down 2.6% Since Last Earnings Report: Can It Rebound?
Restaurant Brands (QSR) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
- Simply Wall St.•17 days ago
Income Investors Should Know The Restaurant Brands International Inc. (NYSE:QSR) Ex-Dividend Date
Attention dividend hunters! Restaurant Brands International Inc. (NYSE:QSR) will be distributing its dividend of US$0.50 per share on the 03 April 2019, and will start trading ex-dividend in 4 daysRead More...
- GlobeNewswire•22 days ago
Detailed Research: Economic Perspectives on Intelsat S.A, Sprint, Restaurant Brands International, Tower Semiconductor, TE Connectivity, and Global Blood Therapeutics — What Drives Growth in Today's Competitive Landscape
NEW YORK, March 04, 2019 -- In new independent research reports released early this morning, Capital Review released its latest key findings for all current investors, traders,.
- InvestorPlace•26 days ago
7 Reasons Kraft Heinz Stock Is a Contrarian Buy
It's never good when a company announces a $15.4 billion non-cash impairment charge. It's a sign business is not going as planned. On Feb. 21, Kraft Heinz (NASDAQ:KHC) announced such a charge, sending Kraft Heinz stock down 27% in a single day of trading. If you've owned Kraft Heinz stock since the end of 2017, and still hold, your paper losses are closing in on 60% … an awful feeling for any investor. I haven't written a lot about Kraft Heinz in recent months. While I knew things weren't going well at the company, or in the entire processed and packaged foods industry for that matter, I had no idea that it was this bad. InvestorPlace - Stock Market News, Stock Advice & Trading TipsYes, people are trying to eat better, but there are still a lot of people buying Oscar Mayer hot dogs and Kraft macaroni and cheese dinners. A 60% haircut over 14 months seems like an overreaction, but Mr. Market is going to do what it wants when it wants. There's not much we can do about that. Back in April 2017, I included Kraft Heinz in a list of ten stocks to buy for the next decade. Of the ten stocks, only KHC is in negative territory after 22 months, averaging a 43% total return with Blue Buffalo getting acquired in April 2018 by General Mills (NYSE:GIS), hence the number nine in the title.That is good news.The bad news is that an IP reader saw my article at one point and picked KHC out of the crowd, prompting the individual to send me a course-worded email on the news.In this business, there's nothing worse than hearing about losses. You only want gains and wins. We all know that doesn't always happen. I feel terrible, but it's time to move on.After some reflection, I've come up with seven reasons why contrarian investors might want to buy Kraft Heinz stock. * 10 Blue-Chip Stocks to Lead the Market Note: If you're not prepared for more potential losses, do not even consider an investment. Warren BuffettAs you probably know, Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) is the largest shareholder in Kraft Heinz with 26.7% of its stock, slightly ahead of private equity firm 3G Capital, Buffett's partner in the Kraft Heinz acquisitions, at 23.9%. Both lost billions on paper as a result of the impairment charge. Buffett has admitted that they had made two mistakes with Kraft Heinz. First, they overpaid for Kraft and secondly, although he feels they didn't overpay for Heinz, they acquired $100 billion in tangible assets between the Heinz deal and the Kraft merger, making today's changing packaged foods industry a much more difficult operating environment than when they did the merger in 2015. The good news is that Buffett has said he isn't going anywhere. The bad news, at least so far, is that he hasn't shown any enthusiasm for raising his stake or buying out his private equity partners. My gut tells me that will change if its stock price falls into the $20s. 3G ExitWarren Buffett's a loyal partner. Since the impairment charge news, he's been very complimentary of his 3G partners. "I'm certainly happy to be Jorge Paulo's partner," Buffett said about 3G co-founder Jorge Paulo Lemann. "He's a terrific human being, and very smart on business."While Lemann might be smart about business, 3Gs infatuation with zero-based budgeting, where every expense must be justified each year, has focused the company on cost-cutting instead of innovation. That has led to old and tired brands unable to compete with smaller, more customer-friendly brands. If 3G were to sell their stake to Berkshire and Buffett brought in a new management team focused on innovation, there's no reason why its stock couldn't move back into the $40s. * 10 Monthly Dividend Stocks to Buy to Pay the Bills It probably won't happen but it should. New CEOCurrent Kraft Heinz CEO Bernardo Hees is a 3G guy. He has worked for 3G businesses ever since graduating from college and is still a partner of the private equity firm despite his day job running the company. Trained as an economist, he's a numbers guy. Before becoming the CEO of Heinz in 2013, he ran Burger King Worldwide for four years. Before that, he ran 3G-owned businesses in Latin America. Burger King is hardly the same business as Kraft Heinz, but good CEOs can transition between industries and sectors. Cost cutters, not so much. Crain's Chicago Business contributor Joe Cahill wrote an interesting article in November about Kraft Heinz needing a new CEO long before the impairment charge. I couldn't agree more. "Hees needs to bolster product development and marketing capabilities, while reorienting company priorities toward growth after instilling an overriding zeal for cost containment," Cahill wrote. "At the same time, he has to convince Wall Street that investing in growth won't erode the industry-leading profit margins that set Kraft Heinz apart from industry rivals."If a business journalist could see the forest from the trees, as Buffett recently quipped, why couldn't Hees?A new CEO with real packaged foods experience would be a nice start to turning around Kraft Heinz. Reversion to the MeanOn this one, I'm probably grasping at straws. Reversion to the mean theorizes that stock prices generally tend to return to their historical average or mean. Since the merger in 2015, KHC stock has traded between $70 and $100; that's 31 months before moving lower.That said, reversion to the mean doesn't always occur, and when it does, it often has more to do with improving business conditions than any historical trend.The question aggressive investors ought to be asking themselves: Is this a shift in the norm for Kraft Heinz, which means a $32 share price is fully justified or is this an abnormally low level for KHC stock?If Buffett is not buying more stock, it's possible he feels $32 isn't the bottom. It's also possible he doesn't want to make a bad situation worse by increasing Berkshire's stake at a time when the future is unknown. * 7 of the Best ETFs to Buy for a Rock-Solid Portfolio If you own KHC stock, you might want to pray for reversion to the mean. DivestituresThere's one constant with 3G companies: They tend to have large amounts of debt. Take Restaurant Brands International (NYSE:QSR), the owners of Burger King, Tim Hortons and Popeyes quick-service restaurant chains. 3G hold 43% of the voting shares in the Toronto-based company. It has $11.8 billion in total long-term debt to just $913 million in cash. That's a lot of debt for a franchise business. As the global economy slows, the winning stocks will be those that have strong balance sheets. I wouldn't characterize Restaurant Brands' as such.As for Kraft Heinz, it has $30.9 billion in long-term debt and just $1.1 billion in cash. Its debt represents 79% of its market cap, a relatively high level. However, as Buffett has acknowledged, the company has significant tangible assets that it could divest to other private equity firms, reducing the amount of leverage to its balance sheet. After all, if private equity could bring Hostess Brands (NASDAQ:TWNK) and the Twinkie back to life, it's possible some brave souls could do the same with some of Kraft Heinz's brands. Acquisitions In early January, Kraft Heinz completed its $200 million purchase of Primal Kitchen, a maker of healthy condiments, sauces, salad dressing and snacks. The business operates under the company's Springboard platform, which includes some up-and-coming food brands disrupting the industry. Last October, Kraft Heinz announced it was buying Ethical Bean, a Canadian coffee brand that meets a high standard of environmental and social stewardship. Although Ethical Bean is a company with less than $10 million in annual revenue, Kraft Heinz sees an opportunity to grow it.These are the kind of stealth-like acquisitions it should have been doing from the get-go. While they're not massive deals of the Unilever (NYSE:UN) ilk, they give the company a more contemporary vibe, and that's vital if it wants to deliver shareholder value in the future. * 7 of the Best Biotech ETFs From little acorns do mighty oaks grow? Reinvest in BusinessThis final point is vital to Kraft Heinz's future. It must be apparent to Buffett and 3G at this point that cost-cutting is not the answer. Between 2014 and 2017, Kraft Heinz increased its operating margin by 840 basis points to 23.5%, prompting most, if not all packaged food companies to adopt some form of cost controls. However, you can only cut out so much fat before your business starts to flatline. "Savings can only go so far in boosting margins," stated Just-Food.com contributor Dean Best recently. "Over time, sustainable sales growth is needed, too. And Kraft Heinz has not been able (or, some would say, willing through investment in its brands) to consistently grow its top line, either on a reported or an organic basis."Investors, worried that Kraft Heinz will be unable to reignite sales growth, have exited the building. It is going to take 12-18 months to regain investor trust and confidence. If it wants to stop the bleeding from its share price, it's essential that it delivers some coordinated growth strategy to the markets before summer gets rolling. If it doesn't have the attention of investors by June, I could see it drop into the $20s.Divestitures such as Maxwell House and Planters are welcome. However, if it doesn't come with a plan for growth, a cleaner balance sheet won't save its stock price. As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 5 STARS Stocks That Continue to Define the Future * 7 of the Best ETFs to Buy for a Rock-Solid Portfolio * 5 Real Estate Stocks to Buy for Dividend Income Compare Brokers The post 7 Reasons Kraft Heinz Stock Is a Contrarian Buy appeared first on InvestorPlace.
Motley Fool•27 days agoCarrols Restaurant Group Inc (TAST) Q4 2018 Earnings Conference Call Transcript
TAST earnings call for the period ending December 30, 2018.
