Taco Bell would be good one i reckon.
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Taco Bell would be good one i reckon.
In the year 2000 RBD Balance Sheet, the goodwill listed as a result of the Eagle Boys acquisition was $23.186m. That goodwill rose out of the laying out of real money, of *my* money (for I was shareholder back then) so RBD could buy the leases and burn the logos of some 50 Eagle Boys stores.
Whatever the real value of goodwill is now, it was cold hard cash then. And it still hurts now to see that cash frittered away.
Everyone is allowed to make mistakes, as without mistakes you don't learn. But when RBD writes off their investment in PH Victoria, then PH New Zealand and (soon?) Starbucks NZ one has to ask the question. What has mangement learned? And exactly what expertise are mangement bringing to these businesses?
And you know why RBD got into Pizza Hut Victoria don't you? Becuse of their success in managing Pizza Hut New Zealand! Their real success was in eliminating a whole chain of retail competition in NZ with one stroke. Once real competition reemerged though, the flakiness of RBD mangement was exposed for all to see.Quote:
As for other businesses - plenty out there now that RBD is rid of its problem child. I guess the risk is that RBD does another PH Victoria.
SNOOPY
Taco Bell has been mentioned as a possibility before, back in the Jim Collier days(?)
However back then, mangement decided to run with the Starbucks concept for their third arm instead. I wonder if that decision will prove a mistake?
I have done quite bit of reading on Taco Bell, mainly because I am a YUM (the parent master franchise holder) shareholder. The interesting thing is, in the United States, Taco Bell has more outlets than KFC. Yet outside the USA, Taco Bell is outnumbered by KFC in a ratio of 50:1. And Taco Bell has had plenty of time to grow overseas, as they were first franchised 45 years ago.
Taco Bell is listed as the market leader in the 'Mexican Quick Service Restaurant' sector. Does that mean Taco Bell owes its existence to millions of Mexicans coming over the border?
I am left wondering if Taco Bell can be made to work in another country. Wasn't there a Taco Bell in Sydney a few years ago? What happened to that? Are there any in Mexico?
How do they compare with 'real' Mexican food outlets?
SNOOPY
Taco Bell are a similar format to BK and McDonalds, its takeaway food, but its mexican.
They were a very cheap meal. There is a mexican place on Victoria St in Auckland that has been there 20 years or so. The decor doesn't appear to have changed and its been packed every time i have been there. It just makes me wonder if cheap and cheerful mexican food could go quite well here.
To give people some idea of how big your home town is Yankiwi, it is similar in size to Levin (population 15k). I stand to be corrected here, but I think Levin has a KFC and a Pizza Hut as two separate stand alone units. I have read about the 'multibrand' units that operate in the USA. As at year end 2008 there are 4629 such units, but only 40 of those offer food from three concepts.
For me the NZ version of multibranding (those shops that sell fish and chips and burgers for instance) is a turn off. I tend to think that outlets that try to do too much end up doing mediocre job of everything. What is your opinion of how multibranding works in your home town Yankiwi? Do you think it would work for Restaurant Brands in New Zealand?
SNOOPY
Your old mate Bongo rates RBD a buy and says at least a 'dollar and a half'
He's also glad that they finally listened to him and going to hock off some the Puzza Hut stores .... something he told them do years ago when he had a significant shareholding
Thought you would like to know that Snoopy
In my view Taco Bell would be a competitor for those largely Greek Souvlaki places that serve Pita bread wraps, with carved spit meat of your choice. There are certainly plenty of those about. Am I correct that Taco Bell serves up mince in a hard corn chip style shells? If that is so, it does sound like a second rate option.
I once thought of opening a Somali takeway outlet as an antidote to the high fat western takeaways. I would have served up only white rice and not much of it. When customers inevitably complained I would have told them to be thankful for what little they got. Maybe Mexican's are similarly grateful for Taco Bell?
SNOOPY
It is all very well rating RBD as a buy. But has Bongo bought any? And have any of Bongos investments in other retailers been as successful as my own investment in RBD in particular or retail in NZ in general over the years?
I am a true long term investor in RBD, having been on the share register since the company listed in June 1997 (albeit in a small way). I bought the shares not to 'get rich quick', but for income. Over the years I have built up my shareholding a lot, with what I would call judicious buying. My overall capital gain over that time has been, wait for it, nothing. Any time soon I expect Phaedrus to pop up with a long term chart to show what a failed investment this has been. However, if you look at the dividends that have been paid over the years you will find a rather different picture.
Dividends since listing have totalled 96c per share, including the effect of the 1:12 bonus issue on 30th March 2000. We can therefore look at the average compounding return aover those twelve years as follows:
($1.02)(1+i)^12=($1.02+$0.96)
This gives an average compounding return of 5.7% after tax or 8.5% before tax - all of it due to dividends in my case. This is a good result which has been achieved despite the fiasco of the RBD expansion into Australia, and in more recent times the huge problems with Pizza Hut in New Zealand.
Of course those shareholders who bought in at the float at today's equivalent price of $2.03 - the literal buy and hold brigade- will not be doing so well. The secret to investing in RBD for me has been buying when the price is low and people cannot see the underlying strength of the business above the raft of negative news.
Over the last twelve years my overall 'retail investment strategy' in NZ has been surprisingly focused. Before I first held RBD I held no retail shares on the NZX at all. For a while I became a WHS shareholder too. But I sold out after the Australian expansion failed (for a nice little profit it must be said) into the Foodstuffs takeover offer at $5. Over the subsequent months I carefully reinvested that capital into RBD as well.
Overall then my time with RBD has been a roller-coaster ride with more down times than up times, yet I have come out well ahead. Therein lies a lesson to the 'dividend denying' out there.
SNOOPY
discl: Have held RBD for 12 years over which time the share has grown from my smallest NZX investment, to the point today (boosted by the partial share price recovery over the last few months) to my largest NZX investment.
Well, there it is again Snoopy. Another 10 - 12 year "investment" for zero capital gain - this, in spite of RBD having risen over 70% recently. It is painfully obvious that you are doing something wrong.
Failed is such a strong word Snoopy. I would prefer to categorize it as a very poor investment. Especially when you compare it to the average market gains of about 100%, over this period.
'Fraid not. RBD has been in a long-term downtrend for the last 8 years, and has a confirmed trendline in place. Over this extended period of time it has fallen an average of 15 cents/year - notwithstanding the recent 70% rise! A dividend of around 8 cents/year is not enough compensation for such capital destruction.
http://h1.ripway.com/78963/RBD816.gif
I don't think too many people would be interested in emulating your "secret", Snoopy! You also need to be able to sell when the price is high. Buying is only half the story.
See that? Right there is the main reason for Snoopy's conspicuous lack of success. "More down times than up times"? Folks, that's called a DOWNTREND. You don't want to be buying (or holding) downtrending stocks - whatever their dividend yield! Why fight the market?
People, read that statement carefully. This is PRECISELY what happens when you "average down" and it is the other reason for Snoopy's woeful underperformance. This undesirable state of affairs is the logical consequence of continually adding to a losing investment, of buying more of a downtrending stock as the price progressively falls. YOUR WORST INVESTMENT BECOMES YOUR BIGGEST INVESTMENT. This is the exact opposite of what you want. Your largest investment should be your BEST. This occurs quite naturally as a logical result of following the old rule "Cut your losers and let your winners run".
When your biggest investment has returned zero capital growth in 12 years, something is FUNDAMENTALLY wrong.
I agree with you Phaedrus, especially with respect to your largest investment being your best by 'natural selection'. Always cut your losers.
I note that RBD is respecting its long-term trendline linearly on your chart rather than the oft-drawn logarithmic trendline. This indicates to me that the trendline is falling at a greater average percentage from one year to the next.
If it was a log chart...am I correct in thinking (because I haven't checked for myself yet) that the price action is even further away from the trendline than it appears on the chart above? Why would anybody bother with it.
All this talk about Pizza Hut, KFC, blah blah blah is a waste of time when one look at a chart like this tells you all you need to know about whether it is a good investment.
NO.
Some people on this site are long term investors and tend to hold a share once bought. Others buy and sell actively and are traders.
People compare the results obtained like they are comparing apples with apples.
The one thing none of the traders mention is that they are liable to pay tax on their gains. Liable is the key word here. If they don't declare the income then they won't pay it. But if the IRD look at their earnings then they will end up paying it plus plenty more in penalties.
Remember, the buyers intention is what matters to the IRD, not how long you hold a share. If you bought a share with the intention of trading it, then even if you hold it for five years the IRD expects tax to be paid on any gain.
It would be good to see more accurate comparisions being made by the participants of these forums.
Phaedrus the NZX50 is a gross index that includes dividends. You have to add on the dividends to get a comparable result. So my gains have actually been 94% (or 100% in round figures). More or less the same as the index. Not 'zero' as you claim.
You have set up a straw man Phaedrus. The capital loss of buying twelve years ago while just waiting and collecting dividends is not a sufficient reward - Quite right. But that is not what I would recommend. And that is not what I did.Quote:
'Fraid not. RBD has been in a long-term downtrend for the last 8 years, and has a confirmed trendline in place. Over this extended period of time it has fallen an average of 15 cents/year - notwithstanding the recent 70% rise! A dividend of around 8 cents/year is not enough compensation for such capital destruction.
"Your largest investment should be your BEST." Sorry I can't agree with that Phaedrus. As a long term investor I am always working towards a balanced position, not a skewed one.Quote:
People, read that statement carefully. This is PRECISELY what happens when you "average down" and it is the other reason for Snoopy's woeful underperformance. This undesirable state of affairs is the logical consequence of continually adding to a losing investment, of buying more of a downtrending stock as the price progressively falls. YOUR WORST INVESTMENT BECOMES YOUR BIGGEST INVESTMENT. This is the exact opposite of what you want. Your largest investment should be your BEST. This occurs quite naturally as a logical result of following the old rule "Cut your losers and let your winners run".
So I am always looking to add to my worst investment before topping up my best.
I notice you are speaking as though there are only 'good' and 'bad' investments Phaedrus. For a long term investor this distinction is not the way investments are defined. There are plenty of good investments out there that I wouldn't touch because they are poor value. Likewise there are 'bad' investments out there that I seek because the market has discounted them out of all proportion to their actual 'badness'. If my biggest investment is also my best, then this is a potentially dangerous situation. Such an investment becomes vulnerable to the double investment risk of earnings reduction and earnings multiple reduction. Long term investment is all about balancing relative value. Not seeking out the 'good' and the 'bad'.
It is not all about capital growth Phaedrus, it is about total returns. You can't just continue to ignore dividends. As shown in this case this has lead you to a massive error of judgement. Your view is that I have made nothing in the last twelve years, when simply adding up the dividend returns means that the sum of dividend returns has actually been 94%. A huge difference which you refuse to acknowledge.Quote:
When your biggest investment has returned zero capital growth in 12 years, something is FUNDAMENTALLY wrong.
The main reason for the lack of market capital growth of RBD Phaedrus is that:
1/when the company listed in 1997 is because it was floated with a puffed up PE multiple.
2/ when a company pays out almost all of its operational earnings as dividends (as RBD did until two years ago) you would not expect the price to rise.
There has been no significant underperformance here Phaedrus.
A return of 5.7% after tax compounding return will turn $1000 into
1000(1+0.057)^12= $1945 after twelve years, such is the power of compounding
On average that equates to an annual return of $1945/12= $162.08 per year.
That means that if you wanted to get that same return at the bank, you would have to look for a bank blackboard one year return rate of 16.2% -after tax. Or 24% before tax (assuming a tax rate of 33%). How many banks do you know year in year out that have offered a return like that?
My investment in RBD has done exactly what I went into it for. It has paid a good regular income over twelve years and outperformed the banks *significantly*. Sure my capital has not grown, but neither has it shrunk. This is exactly what you would expect from an analagous bank term deposit in fact. You need to look at your measuring stick Phaedrus, if you think a performance like that is poor.
SNOOPY
Before anyone else picks me up on these calculations, I should point out that in my attempt to simplify the maths in calculating my returns, the figures above do not tell the correct story.
Income investors in RBD at any one time are considering what the yield is at the time they make their investment. This is not the same working out an average yield by summing the income over the whole investment period and dividing by the time of the whole investment period as I have done above. The instantaneous yield changes both with the prevailing share price and the actual dividend paid out. If we now look at an investor who invested on 30th September each year, the actal yield achieved over the subsequent twelve months was as follows:
Year, RBD Share Price 30th Sept, Dividend, Net Yield, Gross yield, Typical Bank rate
1997: $2.37, 3c, 1.3%, 1.9%, 6.5%
1998: $0.80, 7.5c, 9.4%, 14.0%, 6.5%
1999: $1.30, 10.25c, 8.0%, 11.9%, 5.5%
2000: $1.14, 9.0c, 7.9%, 11.8%, 7.0%
2001: $1.56, 8.0c, 5.1%, 7.7%, 5.5%
2002: $1.72, 9.0c, 5.2%, 7.8%, 5.2%
2003: $1.25, 9.0c, 7.2%, 10.7%, 4.9%
2004: $1.29, 9.0c, 7.0%, 10.4%, 5.6%
2005: $1.40, 9.0c, 6.4%, 9.6%, 6.25%
2006: $1.08, 5.5c, 5.1%, 7.6%, 7.0%
2007: $0.87, 6.5c, 7.5%, 11.1%, 8.0%
2008: $0.65, 7.0c, 10.8%, 16.0%, 7.75%
The second to last figure in each row is the return that should be compared to prevailing term deposits, the last figure in each row. As you can see in all years bar the first (1997), there has been a big advantage in investing in RBD instead of in the bank. (Forget that 24% equivalent figure in my last post).
The numbers are different but the conclusion is not altered. If you can invest in RBD using whatever method you choose - and retain your capital as I have done-, this has been a very successful investment over the years.
SNOOPY
Hi Snoopy,
Any idea what inflation has averaged at over your 12 year time frame.?
cheers
Moi.
I'm not going near this argument, but Snoopy will also have enjoyed tax advantages from not having his capital gains taxed.
The point that is often missed is that using technical entry/exit points does not necessarily a trader make.
It is quite possible to use TA and be a long-term holder of a stock in much the same way that Snoopy has with RBD. Just because you use TA to time your entry and exit points does not mean that you are automatically tax liable. You could have held FBU continuously for 4 years using TA entry and exit from 2003-2007, collecting both dividends and capital gain along the way.
I don't speak for the 'other FA crowd' Yankiwi, only myself.
Generally I would compare my New Zealand sharemarket investment performance to an NZX index. However, that part of my portfolio they I have invested in for 'income' I would tend to compare to a bank term deposit. RBD has always been an 'income investment' for me.
SNOOPY
Not in this case Lego Man. My average entry price was $1.02. As I write this the market price is $1.02. I haven't made any capital gains, so my 'saving' in 'capital gains tax' (trading income tax) is nil.
A trader who has made some trade profits along the way (if there is such a person) will be ahead on a capital basis. Because the fact that they have paid tax on capital gains over and above trading costs indicates that they have actually made a capital profit. And any capital profit is better than none. (Except that is if being out of RBD means that you have missed out on the greater benefits of the dividends that the 'buy and hold' investor has banked by just doing nothing.) Clear as mud yet?
SNOOPY
Snoopy is of course not the only one with the unfortunate penchant for "investing" in downtrending stocks. Click here to view a particularly cruel illustration of this practice in action. Different stock. Different punter. Same problem.
We are covering old ground here. Periodically I pull Snoopy's tail by highlighting the negative effects of his ignoring prevailing market sentiment when timing his stock purchases. Click Here to see how little our respective stances have changed since last time!
Snoopy is obviously quite happy with his system and content with the results he is achieving. I guess there can never be consensus when our aims are totally different. Mine is to maximise capital gain and his is to maximise dividend yield. Each to his own, eh?
We all invest for the exact same reason, and that is to increase our wealth at a higher rate than bank interest. If we get fixated with dividends, completely ignoring the share price downtrend, then that is being straight out stupid. The market in general follows great trends in both directions, from over priced to under priced. Regardless if you are a FA expert or not, it is completely unwise to hold shares in prolonged downtrends. The market always appears to know before the facts become general knowledge.
This raises the question of market trend being more important than fundamental analysis.
Farm service companies always lag behind farm gate prices, so why not study farm gate prices before making your buy or sell decision. I can tell for instance what time of day to buy or sell my mining shares simply by looking at the previous nights price charts.
Nickel goes up five pc buy on opening, nickel goes down five pc sell on opening. The company as long as it is a good solid company will follow the price level of the commodoty so why study the fundamentals. The market in general will rise or fall regardless of individual company fundamentals making it a very risky place for FA investors. Macdunk
BRICKS says to all the OLD knockers of KFC eat your words and watch Snoopy head for
the bank with a smile on his face,, Its the Mr Chips days all over again a large DIV increase should follow and just keep building in the years to come as in the past this is STOCK..
This one has taken patience, hasn't it Bricks. But after years of share price declines, it looks like the payoff is happening in a big hurry, over a matter of months. Of course the share price declines do not matter if you are prepared to buy on the dips and pocket those dividends, which have remained at a steady 11% or so yield, as the 'penalty cost' for holding an apparent non-performer.
The RBD share price recovery has been much faster than I would have expected. So it is just as well I wasn't trying to 'time the market' with my RBD share purchases.
The tragedy is those 'smart traders' who have ridden the share price rise from 70c to just over a dollar will have sold out over the last month or so as the share price stagnated and dropped below the hypothetical trend line. Thus not only will they be facing a capital gain tax bill. They will have missed today's quantum share price leap. Sad, but that is what happens when you don't have any fundamental understanding of the underlying value of the businessess that you own and are only concerned with what other people think: that mysterious 'smart money' contingent. In this internet age, the small investor is no longer at the disadvantage they once were, regarding access to information. But of course to take advantage of this information, this requires you to read those NZX releases yourself and do your own homework. And that is all too much effort for those who think they deserve to gain something for nothing, by riding on the coat tails of the 'smart money'.
An upgraded $15m projected profit over 97m shares on issue equates to earnings of 15.5cps. At $1.20, the projected PE ratio for FY2010 is now under 8. This turnaround has been no surprise to me because it was inevitable once Pizza Hut stopped losing bucket loads of money, even if the rest of the business showed zero growth. Needless to say there is absolutely no chance of me selling any of my RBD shares at a price anywhere near $1.20. And to contemplate selling at 90c or 70c or whatever the share price got to last year just because the share price was going down - as some people on this forum were exhorting me to do - can now be seen for the insanity it was.
SNOOPY
discl: hold RBD (but will not be heading for the bank yet with any of my booty.)
Snoopy, it is because you make no attempt to 'time the market' that your RBD returns have been so abysmal. You ignore market sentiment. You buy in downtrends. You fight the market.
Complete and utter nonsense. Here is an update of the chart posted on page 90. It is quite evident that the indicators that got 'smart traders' into RBD at around 70 cents have NOT triggered ANY Sell signals and are in fact nowhere near signaling any.
RBD was in a steep uptrend then went into a tight $1.00 - $1.06 trading range. Statistically, these break to the upside 70% of the time, so on this basis alone, the odds clearly favoured continuing to hold RBD.
Snoopy, what really is sad here is the unfortunate fact that your deep fundamental understanding of RBD has not helped you at all - your biggest investment has returned zero capital growth in 12 years! The "other people" you refer to are the market and collectively they know all there is to be known about RBD. What they think really does matter. A lot. Those that ignore market sentiment (like you) pay a heavy price. Those that DO concern themselves with 'what other people think' have made more capital gain from RBD in 7 months than you have made in 12 years.
http://h1.ripway.com/78963/RBD919.gif
Last month RBD had given me zero capital growth in twelve years Phaedrus. But now my capital return is +15%. Granted over twelve years that amounts to little more than 1% per year. But add that to the average gross dividend yield of 10% and I have still earned 11.3% gross per year through good times and bad times. That return is not abysmal as you put it. In fact it is slightly better than market returns.
Of course although I haven't tried to time the market, I have taken advantage of the market when prices are low. That 11% return is averaged over twelve years, but my average holding time for RBD is only three years (over which time the company has relatively outperformed), due to most of my investment going into this company in the last couple of years. That means *my* average returns are actually rather better than 11% per annum, when I take into account when I owned most of those shares. So despite not trying to time the market, I did use market timing - after the event, with the RBD share price bashed down - to boost my returns.
To summarize there has been no underperformance from RBD, for me, because I was prepared to buy low when others were not. My total returns have been approximately twice that of putting my money in the bank, which is exactly what I set out to achieve with this income based investment.
Ah so you are still on board Phaedrus! It is good that you didn't just sell on the (steep) trendline break and your indicators have kept you in the game. We might make an investor out of you yet!Quote:
Complete and utter nonsense. Here is an update of the chart posted on page 90. It is quite evident that the indicators that got 'smart traders' into RBD at around 70 cents have NOT triggered ANY Sell signals and are in fact nowhere near signaling any.
RBD was in a steep uptrend then went into a tight $1.00 - $1.06 trading range. Statistically, these break to the upside 70% of the time, so on this basis alone, the odds clearly favoured continuing to hold RBD.
SNOOPY
discl: hold RBD
KFC - whoops sorry RBD - continues to march upwards (closed at $1.23 today) despite the market being down since I last posted. Therein lies a lesson for those who refuse to buy anything while the market is trending down. Not all shares slavishly follow the direction of the index.
I am not so sure that a large dividend increase will follow the increase in positive cashflow. The non cash goodwill writedowns will make the balance sheet look sicker and probably hasten the resolve of RBD to pay down debt.
At least the stemming of losses at Pizza Hut takes away the uncertainty around individual branches being saleable. RBD now has a choice with their debt reduction program. They can either sell Pizza Hut branches, or repay debt by diverting the improved cashflow in that direction rather than increasing the dividend (or both). Either way I think RBD will be in a substantially better position two to three years down the track when compared to now, even if sales growth stalls from now on.
SNOOPY
discl: hold RBD
What do you guys think of Hells Pizza going into the lower end pizza sector to compete with Dominos and Pizza Hut? I personally think Hell is making a wrong move that they will regret.
Have to say Pizza Hut's pizza taste better than Dominos.
I can't say I have heard of Hell Pizza going downmarket Doc. Do you have a link?
I am surprised as didn't the founders (as master franchise holder) object to cutting quality proposals by the previous owners?
I did a bit of a search and saw on Trademe by chance that Hell Taradale and Hell Whangaparoa are both up for sale. It will be interesting to follow those auctions as an indicator as to how much RBD might get selling individual Pizza Hut stores.
SNOOPY
WELL as stated by BRICKS up goes the DIV 50% to 4.5 cents and at this rate could be
10 cent year end , Well we told you all with McDuck with all his Quacking & Quacking
Snoopy take a BOW..
Well deserved Snoopy. And Bricks
WELL RBD cracked over $1.50 and climbing is this a $2.00 stock as when it was FLOATED..
SNOOPY`s bow is still coming only thing is he is a very modest PERSON..
Did you see all of those news releases on October 21st Bricks? Russel Creedy the MD buying more shares at $1.37 on the way up. And director and substantial shareholder Danny Diab continuing to purchase too, with some in his latest tranche purchased as high as $1.47. These guys must believe there is a lot more to come from RBD yet! The only reason I won't be purchasing more RBD myself is that I have a full hand already as far as RBD is concerned.
Even at the highest trading price today, $1.56 as I write this, RBD is on a projected PE of little more than ten. Debt has been halved in just six months, without the benefit of any asset sales still to come. I hope RBD doesn't get to $2. If it does, I might have to think about selling some (perish the thought).
What a pity you and I are the only ones who will admit to holding RBD Bricks, after the charts for so long lead many to believe it was going broke. Oh and Phaedrus now holds too I think. But he is keeping a low profile. Still smarting at telling me off for purchasing those RBD shares at around 90c when they were on the way down a couple of years ago I would guess.
When the last of New Zealand's high peaks finally sinks beneath the waves in a combination of global warming induced rising sea levels, earthquakes and tidal waves and the final obituary of this country is written, who will go down as the greatest New Zealander ever?
Will it be Helen Clark for her great United Nations humanitarian works? Sir Ed for his inspirational achievements and difference he made to so many of the mountain people of Nepal? Or will it be the man that has put more bread in New Zealand school lunchboxes than any other person ever? I refer of course to the former 6 year head of Progressive Enterprises supermarkets, the company that sold more loaves of bread to mothers of the nation than any other. And now he is our Chairman of Chicken: the grizzled and great Ted Van Arkel, otherwise known as 'the saviour' (of Restaurant Brands)!
SNOOPY
discl: hold RBD
Great post, Snoopy!
Havn't felt so inspired for years!
I'm surprised that our techies havn't piled in to that uptrend. Perhaps they have?
;)
Very Touching. Cinderella story in the making no question.
Snoop dog. As more of a FA person myself, even i didnt want to touch RBD (and still dont) but congrats to you and Bricksy. U coped the flak and now many of those that gave it to you are nowhere to be heard.
Well done and may the Cinderella story continue.
My records show that my RBD investment has returned 10.8% per annum after tax since December 2003, which is a similar figure. It may not be a "get rich quick" spectacular type of return, but over a 6 year period it's more than acceptable.
Edit: Using today's closing price rather than last Friday's, it's 12.2% per annum after tax - even better!
RBD closed today at $1.55. So my own total capital gain is now 52%. Over the twelve years I have held that represents a compounding rate of capital growth of 3.5%. Add that to my dividend yield of around 10% and my total anual return has increased to 13.5% (after tax) or something approaching 20%pa before tax. Not spectacular enough for some, but enough to see off the NZX50 now by a useful margin now. And unlike the index, because the dividends have been so high and steady, shareholders have been able to make their own decision as to whether they reinvest their dividends or spend them.
For me this has turned into a model investment, but only because I was prepared to buy and keep buying while the share price was low. The 'buy at the float' and hold investors still won't be popping any wine corks, although even they will have earned around 3.4% per annum before tax. That is a lot better than investing in (any?) finance company.
SNOOPY
Bad guess, Snoopy! I would have thought that you were the one that was smarting, though! I was very consistent in my disapproval of your averaging down as you "topped up" your RBD holdings at $1.60, $1.30, $1.24 etc etc all the way down. Every so often I would kindly post a chart and gently point out to you that RBD was still in a downtrend. Some charts highlighted the steady capital destruction as RBD's long-term downtrend ground inexorably on. As you said in 2006 "most of my holding has been bought in the last couple of years, during the time RBD has suffered from the most derision on this forum". That would be from me and MacDunk, I guess! It would be good to look back at those charts but unfortunately Ripway has gone down, taking all my old posted charts with it, so these no longer appear on ST. I am now using Photobucket as my web host - I hope they will prove to be more reliable.
http://i602.photobucket.com/albums/t...PB/RBD1023.gif
MacDuffy, where have you been? There have been plenty of RBD charts posted, showing good entry points. Even the most casual glance at a chart should show you that virtually any TA system would have got you into RBD at 65 - 75 cents.
Hi Phaedrus.
I was referring to the lack of posts to that effect. So the techies were quietly accumulating on the way up?
;)
Your charts may not have gone for good Phaedrus
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SNOOPY
LOOKING topie and a number comes through so BRICKS bought a few to top of his account
before resume its post UPWARDS.. and as they are cum div is very NICE..
http://www.sharechat.co.nz/article/9...nt-brands.html
Daily Share Chat: Restaurant Brands
By Jenny Ruth
Restaurant Brands' KFC store transformation program "continues to deliver extraordinary returns," says Macquarie Equities analyst Warren Doak.
The average increase in sales in the first year of a transformed store is 19%, he says. That, and an acceleration of the program, coupled with new menu offerings and new store openings, are expected to underpin strong same-store sales growth for at least the next three years," Doak says.
"Management's focus is now unashamedly 100% on the core KFC business with management expressing great confidence in the medium-term outlook."
Doak says his forecasts are very conservative relative to management guidance but, even so, Restaurant Brands "continues to trade on remarkably undemanding valuation multiples."
He is expecting net profit, excluding non-trading items, will come in at $16.9 million for the year ending February 28, a 39.5% increase on the previous year.
Doak says the Pizza Hut chain showed a marked improvement in operating performance in the first half but the company remains committed to a controlled sell-down.
The Starbucks chain proved to be the most economy-sensitive brand and its first-half performance was disappointing. "A new management team and a renewed focus on core operations is expected to underpin an improved second-half performance." Doak has a $1.70 per share 12 month price target.
BROKER CALL: Macquarie Equities rate Restaurant Brands as outperform
ON Saturday night felt like some KFC so over we GO to my surprise chock a block store love this story did a quick mental sum and concluded this is profit so just out tonight profit will be up 50% or 18 cents a share this will mean a 10cent DIVIDEN..
How things change. The 'capital destruction' referred to here has all been reversed and all of what some would term my 'averaging down' is back in the black! So much for averaging down (even though I hate that term) not working. Buying RBD while it was cheap for me has certainly proved an excellent investment. Yet even at $1.63, RBD is sitting on a PE of 9.3 to 10.5 after yesterday's profit upgrade. So no sign of RBD being overvalued yet, and the dividend yield remains excellent. Mind you, I'm not taking any credit for predicting the RBD share price rise this year. I just selected RBD to rise 'eventually' and have been caught out by the ferocity and pace of what has happened. Of course being 'caught out' when you are heavily invested in RBD already is not such a bad thing.
The most optimistic forecast issued by an independent analyst before yesterday was $1.80. That figure is looking very attainable now.
SNOOPY
WELL we at RBD are right for chickens for the next five years at slightly reduced prices
when they signed a new contract for North and South Islands so you all can now stop
your WORRIES.. as there is plenty to EAT..
Yuck! No thanks. I prefer my arteries uncloggod!!
But plenty of others don't which is great for the RBD shares I own. Buying a whole lot back in June seemed like a good idea. Pasta was new. Pizza Hut was being turned around. YUM were playing nicer.
Glad I went with it. Excellent capital gain since then, and RBD are a good income stock.
So, no KFC for me thanks but I shall certainly encourage others (especially those I don't like) to buy plenty. All I need to do now is invest in a company that benefits from heart disease. Any ideas?
Well no listed funeral homes as yet,but... Ebos now there you have a growth stock,organic growth i.e heart disease victoms spending lots of money at KFC,pizza hut etc. and external growth by acquisition,yum.
Thus you have life totally covered.
I'm the same, about 20% of my portfolio is RBD but I don't eat KFC or Pizza Hut, and can't stand the Starbucks coffee :) I first got in earlier this year when it was around 90cents (and accumulating more along the way) and consider it one of my safe holdings, and while I have stops set as usual, it's no where near the current SP.
I am pleased to see at least someone else on this forum 'gets RBD' Emearg.
The attitude of the detractors here is akin to not buying a share like 'Steel & Tube' because they could never envisage themselves taking their prized SUV down to 'Steel & Tube', folding down the seats and putting a huge steel girder in the back. As long as the target customers -construction companies- are buying the steel it matters not a jot that you as a small shareholder aren't doing it.
Going back to RBD, I doubt if there is very much crossover between the shareholder base, as represented by those on this forum, and where the biggest RBD customers come from. But just because *we* aren't heading down to the local KFC every week, doesn't mean that we shouldn't be buying RBD shares
I tried out the Tuscani pasta (the meatball one) for the first time last week. I wouldn't recommend it as a stand alone meal it itself. But pick a few lettuce leaves out of the garden, add in a fresh tomato, some radishes and an avacado to complete a salad and you actually get quite a decent feed. And the foccaccia breadsticks were a nice accompaniment.Quote:
Pasta was new. Pizza Hut was being turned around. YUM were playing nicer.
What is more I don't think my arteries were clogged up one bit by my RBD pasta dining experience!
Did you see today's First NZ Capital analyst Sarndra Urlich's valuation update on the sister sharechat website?Quote:
Glad I went with it. Excellent capital gain since then, and RBD are a good income stock.
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Restaurant Brands' latest profit upgrade suggests the recent sales momentum from the KFC business has caught even the company by surprise, says First NZ Capital analyst Sarndra Urlich.
"There is continued evidence that the traction from the already transformed stores is real and long-lasting," Urlich says.
"Add to that a further 30 transformed stores over the next few years and Restaurant Brands could very well enjoy further ‘super growth' from the KFC brand."
Urlich has upgraded her forecast earnings for the year ending February 28 from $16.2 million to $18.2 million and her 2011 forecast from $17.1 million to $19.1 million.
"The reasons for not buying Restaurant Brands in the past are long gone (including no revenue growth, aggressive gearing, ongoing profit warnings etc.)."
Urlich says she doesn't believe the reason for recent growth is purely a function of the ‘buying down' phenomenon during a recession. "Restaurant Brands is also reaping the benefits of effective management and has every chance of further surprising on the upside."
She has upgraded her valuation and 12-month target price for the shares from $1.57 to $1.84 and says she believes "it is not too late to jump on board, notwithstanding the stellar performance of the stock since the beginning of 2009."
BROKER CALL: First NZ Capital rate Restaurant Brands as outperform.
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I have been considering taking some of my capital out of RBD, not because I don't believe in the company, but because I have done so well it is making my NZ portfolio look out of balance. However, when I look at alternative places to put my money, I still haven't found anywhere better than RBD. So I have decided that my RBD capital is staying put. The RBD dividend story on its own is hard to beat and any capital growth we get as a result is just a bonus.
With 97.1m shares on issue and an $18.2m profit in FY2010 now possible, that means earnings per share of 18.7c. At a target share price of $1.84, and with further growth to come, we are still looking at a PE ratio of under 10!
No wonder Sarndra Urlich sees RBD as an outperform with the share price sitting at $1.57! And none of this takes in the possibility of some form of capital return as Pizza Hut outlets are sold off! We know there are better companies than RBD on the NZX. But is there any share on the NZX with better *prospects* than RBD - from an investor perspective at today's prices?
RBD does seem to me the obvious place to put your money. That is why I am overweight in it and intend to remain so.
SNOOPY
discl: hold RBD
Appreciate the analysis Snoopy, reasoned as always and right on the mark from where I'm sitting.
Like you I am overweight in RBD pretty much for the same reason that you are. I have looked around the NZX for a company which is cheaper, with a greater potential to surprise on the upside, and with a better risk profile, and have come up short.
Unlike you I am a recent addition to the share register (this year) but become increasingly confident that it is a good place to park my money for as long as the current direction is maintained.
All three brands have had their challenges over recent years, and I wonder whether investors are a bit gun-shy of RBD given its history of providing unexpected nasty surprises to the market ( for want of a better expression!)
Maybe this could explain the apparently low multiple it is trading on, and given the bullish attitude of management and analysts towards KFC especially, a few more surprises to the upside may see a more deserving PE in time as the stock gains further credibility.
Welcome aboard the share register Zito. I think the current direction will be maintained until the KFC transformation process is complete, which might take 8 - 10 years. The problem is the NZ market is only so big and we all know what happened when RBD sought to export their pizza expertise (sic) to Victoria!
Once the KFC revamp is bedded down, I will then start to get worried over what hair brained direction the company will take off in next! At least at the moment the board and senior management have plenty to do -thank goodness. It is when board and management start to get itchy and look for other ways to express their err -talents?- that we shareholders should start to worry again.
Because of the constraints of those NZ borders, I think that when KFC is brought back to its revamped 'normal sales level' then the company should trade on a PE of about 10. A PE of 10 is appropriate for a company with modest growth potential I think. I take your comment Zito, about looking around for better value on the NZX and not finding anything. But I am wary that this might mean the PE of the rest of the market might move back towards around 10, rather than the alternative scenario of the PE of RBD being revised upwards to market norms.
I am sure you are right again Zito that there remains plenty of market 'baggage' associated with RBD that is going to be hard to shake. But over recent years they have a new CEO, a new chair on the board and are getting rid of their troublesome assets. How much change do they need to show? I suspect that by the time the sharebuying public wake up to RBD, the full recovery potential will already be built into the share price.
SNOOPY
More stores will open as time goes on the population of NZ is increasing at a fair rate for a small country.
There is no doubt that a broad range of ethnic groups go to KFC, and I see no reason why that won't continue
My comment is about future population growth and how some of the fastest growing groups like KFC.
If in doubt look at New Zealand's population projections and/or talk to Restaurant Brands about their most popular KFC stores.
My comment is based on information that was made available informally at an AGM several years ago. It is interesting what you can learn in a chat over a cup of Starbucks coffee and a slice of Pizza.
DINED in for lunch and it was full and contrary to Mr emearg the crowd was mostly from
the White Tribe with there discount sheets going hammer and TONG..
AT Levin the KFC was deliberate fired upon and now out of action with the police chasing the baddies ?, but puts a unite out of action for some time lucky the KFC is in full flight at the moment and with profit rising wont be effect to much properly get built in the new style
but this is always a prob when you run a Biz so security just like airlines will become another EXPENCE..
RBD are at $1.77 today...By my calculations they have been in an uptrend since Jan 22nd 2009.
They have recently broken a 5 year high....
Everyone (Warehouse Thread) are talking them up..i've been in and out of them twice, and am considering getting back in...but the classic dilemma of "is the run about to finish" is daunting me...
The chart says...RBD in uptrend...but I'm still not great at determining STRENGTH of uptrend...
Any views/thoughts/criticisms/help greatly appreciated.
Grazie
PF
If you are beating simply "buying and holding" RBD, then I would advise you to continue on with your trading system. RBD is now technically "overbought" so this is definitely not a good time to buy.
We don't know when or where the run will finish. All we really know is that the uptrend is still strong and as yet there is no technical evidence of any weakening.
The chart below plots a selection of technical indicators. While these are all quite conservative, none are showing any obvious weakening of the uptrend as yet.
http://i602.photobucket.com/albums/t...sPB/RBD124.gif
Thanks very much P,
Since it is overbought...I will stay out and wait for the next dip.
Appreciate the chart and the additional indicators.
Will watch and learn with interest.
PF
As long as KFC slaes keep shooting up, RBD will do well.
I think you guys need to get a bit more savvy on what some of these indicators you guide yourselves by mean. From Wikipedia, the classic RSI indicator, where a value of 70 indicates overbought and a value of 30 indicates underbought is defined thus:
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For each trading period an upward change (U) or downward change (D) is calculated. Up periods are characterized by the close being higher than the previous close,
U = closenow − closeprevious
D = 0
Conversely, a down period is characterized by the close being lower than the previous period's (note that D is nonetheless a positive number),
U = 0
D = closeprevious − closenow
If the last close is the same as the previous, both U and D are zero. An average for U is calculated with an "exponential moving average" using a given N-period smoothing factor, and likewise for D. The ratio of those averages is the Relative Strength,
RS= [EMAU (period of n days)]/[EMAD (period of n days)]
This is converted to a Relative Strength Index between 0 and 100.
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With 'n days' set at 200 days, as Phaedrus appears to have done, what 'overbought' means is that considering previous 200 day intervals as 'rolling windows of interest', with a weighting towards the most recent price action, there have been a lot more up periods than down periods. Using the logic that 'nothing goes up and up forever' you might conclude that the longer the share price gets stronger, the more the likelihood of a significant fall. That statement has an appealing truth about it. But what the statement does not mention is that there is no consideration given to the absolute value of the 'start point' of all this share price action.
That means a share with an underlying PE of 10 that sees a share price rise due to earnings increases that still leaves it with a PE of 10, will likely have a similar RSI to a share price that reflects a PE of 15 rise due to earnings increases that still leaves it with a PE of 15. Yet there is a difference in these two cases. A share with a PE of 15 needs earnings growth to justify that share price. And a share with a PE of 10 (like RBD) does not.
Thus IMO, it is not accurate to say that a share like RBD is overbought because of an indicator like RSI, without considering the fundamentals of the company. Phaedrus's chart indicates that if we believe the long term trend line, then perhaps $1.30 would be a good entry point. I would agree with that. But the question you need to ask as an investor is, how likely is it that such an investment opportunity will present itself? $1.30 represents a projected operational PE of 6 or 7 or something. With a company that is performing as operationally strongly as RBD, I can only say 'good luck' if that is what you are waiting for.
SNOOPY
discl: hold RBD
Snoopy, the chart as posted was prepared for the sole purpose of providing holders with EXIT signals when RBD's weakens and ends. It was never meant to provide an on-going series of ENTRY signals for those that missed out on the Buy signals back in February - hence the absence of any Buy (or Sell!) signals during the course of this splendid uptrend. Longterm holders are interested in the main uptrend and are unconcerned by minor fluctuations so any indicators used should not be too active. You don't want them signaling an exit every time the uptrend eases a little. This is accomplished by using longer time periods.
Right - that is the classic RSI. Here I have de-tuned the RSI and made it less sensitive by increasing the time period. You should also note that OverBought/OverSold thresholds are not even marked on the plot. The 50% crossover point is used to generate signals. This is fairly common practice with slower indicators.
Right. That is why it is called the RELATIVE Strength Index. It measures the internal strength of a stock against itself, so we can easily see any change in strength - whether RBD's uptrend is getting (relatively) stronger or weaker.
A distinction is usually made by referring to such a stock being technically overbought.
Snoopy, I repeat, that trendline was there to provide EXIT signals when the uptrend weakens. It, like all the other indicators featured, was NEVER MEANT to identify "good entry points".
You miss the point completely, Snoopy, because you misunderstand the aim of that chart. IT IS FOR EXIT PURPOSES ONLY.
http://i602.photobucket.com/albums/t...ortterm127.gif
A different chart is required for traders or any latecomers wanting entry signals. As shown here, it could use the same indicators, but with very different parameters of course. Here is such a chart, using the default values for each indicator. You will see that 26 buy signals have been triggered since the initial Buy signals featured in the former chart - most all of them pretty good entry points. There will, of course, be more if/as/when RBD shows transient weakness. No-one would wait for a nominal "$1.30" entry that may well never come.
Note how the RSI default period of 14 days has failed to give a single buy signal so far. It is too insensitive to provide any ongoing RBD entry signals. This is easily remedied by using a shorter period (in this case 6 days) which has provided a good selection of very timely entry signals. Too many signals? Use a longer period. Too few signals? Use a shorter period.
Snoopy, from even the most cursory glance at this chart you should be able to see that buying RBD when it is technically "OverSold" gives MUCH better entries than when it is technically "OverBought". That is why PF quite sensibly said "Since it is overbought...I will stay out and wait for the next dip."
I must confess Snoopy, that I thought you were "a bit more savvy on what some of these indicators mean"!
Thank's for clarifying Phaedrus. In your comments on what you have now confirmed was the RBD 'exit' chart on 24th January you wrote:
So it looked to me as though that 'exit' chart was being used in relation to buying, and I think "Phaedrus Follower" took exactly that interpretation when he wrote on 25th January:Quote:
Originally Posted by Phaedrus
Quote:
Originally Posted by Phaedrus Follower
Or as I would put it, in technical terms. Look for the trendline break first and foremost. That is really what my 'buy at $1.30' comment was all about. If the trendline was respected, the share price would bounce off at around $1.30 marking a good entry point. If the share price dropped below $1.30 then the trend would have ended. To the technical analyst that would be a sell signal. Not so to the fundamental analyst, or at least *this* fundamental analyst. A share that is 'cheap' or 'dirt cheap' is a buy either way, no matter what the RSI indicator tells you.Quote:
Originally Posted by Phaedrus
SNOOPY
discl: hold RBD, average buy price $1.02
Snoopy:
"If the share price dropped below $1.30 then the trend would have ended. To the technical analyst that would be a sell signal."
Not entirely correct. A trendline break does not in and of itself constitute the end of an uptrend. An uptrend is defined as a series of higher lows and higher highs. It is quite possible (and common) for an uptrend to continue despite a trendline break sell signal. For this reason a trendline break should not be used in isolation by technical sellers as an exit strategy.
Lagging the share price... but the family have switched back to Pizza Hut as "takeaway pizza of choice". Couldn't believe the difference in their pizza's. Guess they finally figured out how to make a pizza that has flavour
A good example of a turnaround story and following the directors and management.
Buy when they are buying - they were loading up with shares when there were plenty of doubters still about.
Perfect timing.
SNOOPY is that $2 on the board whats happening how long do we stay or collect the DIV.. where is Mc Duck..
This is the 'turn around' that shows no sign of turning around. Shares are up 8c to $1.90 today. But already there are buyers at $1.92 and no sellers at all under $2. I also hadn't noticed up until today that Brian Gaynor's Milford Asset Management has appeared as a substantial shareholder, as of late January. All good stuff. It will be interesting if the upcoming quarterly sales announcement justifies any of this price action. Perhaps there is a bonus dividend on the horizon with the selling off of some of those Pizza Hut franchises to 'Joe Kiwi Manager'?
SNOOPY
discl: hold RBD, no plans to sell down yet.
Mystery solved Bricks..
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FORECAST: RBD: Profit Upgrade Announcement
4 March 2010 NZX
RESTAURANT BRANDS FORECASTS ANNUAL PROFIT UP 67% TO $19.5M
A combination of stronger than expected trading over the last quarter of the year (especially from its KFC stores) and the successful resolution of a pricing review with a major supplier has meant that the company will deliver a trading result ahead of previous expectations for the year. Restaurant Brands now anticipates its full year net profit after tax (excluding non trading items) for the year ended 28 February 2010 will be in the vicinity of $19.5 million (20 cents per share). This will represent an improvement of $7.8 million or 67% on the prior year's result.
The annual profit announcement will be made on 7 April 2010.
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EPS of 20c per share means that at anything under $2.00, the PE is still under 10! Despite the share price rise, this is *still* looking to be the cheapest share in my portfolio. Amazing stuff!
Probably frying his head in one of those KFC chicken vats by now I would imagine....Quote:
.. where is Mc Duck..
SNOOPY
NO IT'S NOT! That's what Snoopy thought he was doing when he kept buying into RBD's long downtrend, "topping up" with "bargains" at $1.75, $1.60, $1.30, $1.26, $1.24.............
The best time to buy is when the long slide eventually stops and begins reversing. When the first light of dawn tells us that the long dark night is over! When technical indicators that have not triggered for years start firing off Buy signals.
Even MacDunk understood this simple concept - as he quaintly put it "Any one with half a brain wont swim against the tide, you wait until the tide turns, then swim with it."
Yes I did buy RBD at all of those price levels. But I did keep on buying at lower levels as well. And that means my average entry price is now $1.02. You can call my strategy for RBD 'sub optimal' I suppose. But in this case 'sub optimal' means an enormous outperformance of the NZX40/50 over a thirteen year period. If someone did better than I did, well good on them. But as far as I am concerned my purchasing strategy has delivered - and then some.
I can't argue with the theory. But the question is how many traders actually did that (apart from you Phaedrus). Most of the other traders seemed to delight in dismissing RBD. Then when the trend turned, they were so poisoned of thought that they missed the huge ride upwards in what was in terms of my thirteen year investment horizon (so far) was a very narrow window. The way RBD has recovered now even 'buy and hold' from listing (which is not a purchasing strategy I advocate) is starting to look good.Quote:
The best time to buy is when the long slide eventually stops and begins reversing.
When the first light of dawn tells us that the long dark night is over! When technical indicators that have not triggered for years start firing off Buy signals.
I have to admit being surprised at the RBD recovery, at near to $2. I didn't pick it. But my purchasing strategy assured that I was there anyway.
SNOOPY
well done to all who bought... 3 profit upgrades in 6 months. amazing... 55c to 195
this is the kind of story we all want to land every year.
i have to admit they were recommended to me a few. one of those people is actually an acquaintance who is doing time inside! plenty of time to think.
at the time i pretty much laughed....
seems others are having the last laugh. I wonder if maybe WDT might be a potential dog to star for 2010?
The Dunedin North KFC has reopened this weekend after its upgrade. Just in time for all those students to trash...
After a 2+ year break, just tried to order delivery from Pizza Hut again. Took the on-line route (as you do), only ended up stuck at "order submitted", since the site decided to link my address to a closed branch!
However, rang PH - and after only a one minute wait, actually got to talk to a helpful person who processed my order and filed a report re my on-line experience. The whole ordering process only took 25 mins (:eek2:) start to finish so now waiting for the pizzas...
... so, pizza's good (tick), helpful staff good (tick), web-site (oops!).
I guess from the shareholder's perspective, having "room for improvement" is not all bad?
Thank the 'Burger Tower' burger I reckon, such tasty goodness. :)
It has always been thus with Restaurant Brands.....Quote:
I guess from the shareholder's perspective, having "room for improvement" is not all bad?
RBD shares did not respond to the recent 10% profit upgrade. It did initially with the shares trading over $2, but they have now fallen back to around the $1.90 level. One reason could be that quite a number of share options have been exercised in recent weeks. It is possible that some existing management shareholders are selling down their existing holdings to give them cash to take up their cheap shares. Or it could be other shareholders are selling down in anticipation of management doing this selldown when they are finally allowed to. Or it could be that having ridden the recovery wave and booked huge profits fund managers (are there any left on the share register other than Brian Gaynor, who is increasing his holdings?) are taking profits. None of these reasons sound convincing.
Looking through the share register I see that last year South Canterbury Finance Limited owned 350,000 shares. Given their capital requirements perhaps it is SCF who are selling out and depressing the share price?
David Novak of franchise parent 'YUM brands' likens the progress of parent YUM to being in the first innings of a ten innings ball game. My contrasting metaphorical image for RBD is that they are just starting the second half of a battering and bruising rugby encounter. That is because around half of the KFC stores have been 'transformed' under the KFC refurbishment program. Having got through the first half, the fans (read shareholders) are not entirely convinced they can hold on until the final whistle....
The biggest risk for RBD shareholders is I think that the managment and board will be distracted again by going into a new venture. It is slightly worrying that in recent profit announcements nothing more has been mentioned about the sell down of Pizza Hut to private operators. Starbucks it would seem continues as an unprofitable millstone once corporate costs are allocated to that business.
So where to for KFC, I mean RBD if they get through the current bruising rugby encounter? I know that Australia has been a graveyard for them with Pizza Hut. But I wouldn't be averse to them buying up some KFC stores in Australia or indeed some of those independently operated KFC stores that they don't own in New Zealand. Perhaps they could look at acquiring an Asian fast food franchise in New Zealand, like 'Hungry Wok'? Personally I would like to see them completely out of Starbucks. If they do any of the above I would regard it as positive. If they end up having to manage more than two chains I would regard that as negative as past experience shows RBD managment are overtaxed if they have too many distractions.
Given the PE of the shares is under ten with identifiable growth to come, I have no plans to reduce my own holding. There ends my state of the nation address on RBD!
SNOOPY
discl: hold RBD
Sell Starbucks, buy Noodle Canteen.
I think that we have a Noodle Hut in Dunedin now... :)
TODAY BRICKS wrote to KFC and remind them that the KFC was still burned down what where they doing about
a NEW store.. Had a quick reply back confirming that they would reopen on the same site and they where getting council consent process once
consent was obtained rebuilding would start and they are excited about the new store design that LEVIN KFC will have and look forward toto our loyal customers in LEVIN as soon as possible..
SO there we have it not much about a hurry that they are loseing $400,000 T/O a month or more but
Nick Thomsom still collects salary all you can do is ASK..
end with,, I hope you have a wonderful week..
Something very important psychologically happened on the market today. Did the market belatedly respond to the profit upgrade of 4th March?
There was sustained buying for RBD shares at over $2, with buyers at $2.02 and sellers at $2.03. $2.03 has some significance as taking into account the 1:12 bonus issue in year 2000, this was the original issue price back in 1997. A lucky 13 years after listing those original 'buy and hold' investors have *at last* got their capital back! That doesn't mean a zero return as over those 13 long years though, for dividends have been generous totalling $1.03 per share. Those of us who mainly bought into the share later, have of course done much better.
I expect there to be a pause where some of those original investors sell out at $2.03 and another pause later where the orginal investors who are not so good at maths sell out at their original per share buy price of $2.20. After that, on expectation of all of those pizza loving poms returning to their NZ campervan hotels for the World Cup, I expect the share price to settle at around $2.40, which will give a long term PE of 12. (I expect $2.40 may only correspond to a PE of 10 in World Cup year). At that point I plan to partially sell down my rather out of balance excess RBD holding. Why am I announcing this now? So that when the share price does rise to that level you guys can remind me of what I said today and remind me to *actually do the sell down*, rather than getting carried away in some kind of World Cup fever of pizza greed!
SNOOPY
WELL KFC the one to kick the can with an 8 cent div up to 12.5 cents the way it should have been for years like
a lot of KIWI company directors get hold of a big public company and turn it into a small public company, just
like TELECOM hoping RBD has learned a LESSON