Again following the directors has been fruitful with burgerfuel closing last night at $1.10, IPO subscribers are now also in the money.
Printable View
ON such small volumn though. Even if you wanted to throw some play money at it, say $5k, how much would that push up the share price.
Maybe once they get profitable, the founders will offload some of their shares and create a bit more liquidity. That will probably just sink the share-price unless they get some retail support which is unlikely unless one of the small funds like Milford or Pie gets interested.
Their share price is going up like there is no tomorrow! And the PE has reached 87. People obviously think this company is going somewhere! I quite like their business model but will wait another year or two to see if they can continue to improve operationally and financially before buying in.
Any idea when the annual report will be released?
Thankyou, I look forward to it!
Results out https://nzx.com/files/attachments/176676.pdf
Good result, with growth in the Middle East and promising to see possible expansion into Australia. If they keep going like this, world domination will be next
No (that includes my investing company). An associated party does which is why I am interested.
I did look to get in a while back (at about $1) but the market was so illiquid, I would have raised the shareprice 20c just to buy $5k worth so I stayed out. This is still an issue with a free float of only ~15% from memory. Milford was only able to get in as it bought a parcel from the major shareholder.
Crikey i make the PE ratio at 77 with todays profit announcement. That's pricing in a lot of growth.
I am a bit more comfortable with diligent on that sort of PE.
Unless there is a threshhold where economies of scale kick in,and profit takes a serious jump.
Ate here for the first time tonight on Cuba St. Both the girlfriend and I reached the same verdict: 3/10.
The decor is amateurish and the music too loud and obnoxious. Bon Jovi 'Bad Medicine' at 100db I mean come on!
But the main thing wrong is the taste of the food: the burgers are too big, too expensive ($12 for a burger?) and taste flowery and under seasoned. Chips tasted old. The overall impression is everything is shipped in frozen and reheated. The food lacks freshness.
Only plus was the staff were friendly and helpful.
Lol, not going to lie though, the burger fuel food has gotten worse over time, but obviously that is cutting costs to make a more profitable business. Its just like Hells Pizza IMHO.
I still go to these places, quality of the food is still good! Just not the same as it used to be.
Either way they are doing something right, and thats the main thing :)
Another thing Burgerfuel offer, that most other fast food franchises don't, is their vegan and vegetarian options. There was a story recently doing the round about veganism growning 800% in Germany in the last 3 years...so this is definitely a market segment that needs to be catered to in the future.
I've spent the evening having a look at this stock after a couple of recommendations from the "Worth Researching" thread started by NBT today (great idea for a thread btw).
I'm struggling to understand the recommendation considering the astronomical P/E ratio - 83 according to the NZX website!!!
I'm interested to hear how others are valuing this stock?
Peter Lynch fair value gives me about 60 cents (using 20% growth rate which I believe is the max recommended for this method) and still less that $1.40 using a 50% growth rate.
DCF also gives me about 60 cents - but this is based on a lot of guesswork (plus I'm a complete DCF amateur so not very reliable). Plus BFW don't offer much (anything, right?) in the way of sales projections so hard to make any meaningful forecasts.
Ben Graham give me $1.60 (would ya look at that... the current SP!!!) using 50% growth rate which was about the growth rate of Net Income last annual.
Using Graham's formula with a 2014 EPS projection of $0.03 (a 50% increase on $0.02 from 2013 annual) and a 50% growth rate gives me a target price of $2.40.
I'm sure Graham wouldn't have gone near the stock with a P/E ratio of 83, however.
Would love to hear any feedback on these calculations. What value do others place on the company?
Cheers, -F-
I don't know about the Calculations, but to me, the brand screams, EASY TO COPY, not worth the current price - over valued. Then again, some big monster may buy them out. That is how I read how they are expanding, they want a buy out. But they (starter uppers) know the current price is way over valued.... a flood of shares and the share would drop out
I put it down as a "Speculative Buy" just to put something a bit different out there.
I think their NZ expansion will kick off again. South Island stores are coming and more in the North Island too. After a disastrous start in Australia (wrong location and no brand recognition) they are considering this again. The Middle East is also huge. The sales from those stores hadn't flowed through into the profits last released so expect things there. They are also looking for new master franchisees to enter new countries. They have a very good system and can roll out fast once they find a premise and a franchisee.
Remember that expansion doesn't really cost them money, it makes them money, the Franchisee pays all the costs plus the franchise fee, training fee and project management fee.
As Moosie points out, the shares are tightly held. This is an issue as they have no debt and have very little need for new capital, but they cant sell existing capital as that would be a bad sign to the market. The Founders offloading to the likes of Milford is the only way they can do it as the positive of Milford counters the negative of Founders selling.
Thanks for the replies.
I think if liquidity should somehow increase then we'd be seeing a drop in the SP - the low liquidity seems to be propping it up.
For me BFW isn't quite yet a BUY, but that's not to say the SP won't go higher. As you said CJ it's still speculative.
Will definitely revisit when the next financials are released - I expect these will show a solid increase in profits. Could easily show a doubling in profits (as they're not making much right now), halving that whopper (burger pun) of a P/E ratio. This growth seems to be largely priced in for the short term I'd say, so I'll be staying away for now and spending my hard earned on their burgers rather than their shares.
Was certainly worth researching!
-F-
In fact, these companies mentioned by Wolf, look at increasing the value of their location/real estate as much as making reasonable profits on many small quick transactions. I remember this very well from research into these firms when studying. McDonalds is one of the prime examples. Apart from they take marketing to a whole new level compared to many other firms. I don't think Burger Fuel is worth what it is currently trading at. I believe it is more a beefed up stock, that could actually be worth this in the far future. Have a lot of work to do, but are on the right path. A lot of brand support from loyal customer base, who trend into the more on to it, educated, wealthy sector of society. Not a bad place to be. Go sit at a Burger Fuel store and take a look for yourself, and then head over to KFC for some drive through generalizations...
Do they have one with a politically incorrect name like "The Fat Bastard Burger Combo " Quadruple the calories, extra mayo, supersized drink, not for the faint hearted. Just like eating a baby? great for free marketing while they can keep it on the menu... That's a good effort from your mate... I'd hate to experience the fall out the following day...
Big news today. I knew an American was sniffing around but decided not to indulge on the insider info.
Not quite sure if this is good news. Pirce is $1.35 and potentially, all their purchases up to 50% can be from Roberts and Mason.
Having said that, if they expand it into the US....
They were sniffing around last year so the rumour has been around for a while. My guess all everyone at head office knew and all the franchisees as well. I hadn't heard anything recently.
The increase in price with the purchase a few days ago is just because of the big spread and lack of liquidity. It has always jumped around with each purchase/sale because of this. If you knew, and decided to inside trade, you would have cleaned out all the sell orders just to make it worthwhile.
Look at the 6 month graph and it shows no signs of insider trading.
Very happy my love of burgers led me here! Onwards and upwards!
I was under the impression that a lack of affiliation with US was a big plus for BFW's operations in the Middle East.
Insane! First time I have seen a share with no sellers!!!
Insane! First time I have seen a share with no sellers!!!
crayyyyyyyyyyyyyyzieeeeeee
I don't follow this stock, but notice the US investors are buying in at $1.35. Interesting that the shareprice has jumped $1 and is now $2.50! A bit ahead of itself maybe?
At first glance this new investor (and the franchise expertise they will bring) looks like a good for the company though, I must admit.
$2.60 now. up 73% on volume of only $173k. VWAP is 2.13.
Wish I had been slowly accumulating now. The brokerage fees to pick up all the small parcels would have been worth it.
Wondering if US buyers will start buying BFW as well...
But US has so many burger chains (in n out, fatburger, johnny rockets etc, etc,), don't know if it'll be easy to crack, however, the USA do have a lot of muslims, so therefore this could be there niche...
Surprisingly BFW has not expanded into asia, could really be a niche there, only MC'ds and BK, a lot of Asians have praised burgerfuel
Talking about burgers, man best burgers would be shake n shack! Sooooooooooo guddddddd lol
https://www.facebook.com/groups/bigj...=group_comment
Big J's burgers in mt wellington, Auckland - voted multiple times best burgers in auckland and i stand by it. Moosie you should check it out while you're up here, not to be missed! they do a new special burger of the week each week, check their facebook page to see pics/ingredients etc :) http://www.bigjs.co.nz/
Well, I just got rid of my modest holding at $2.70 (bought at 98c). It was good news today, but I think the price has gone a bit over the top and I expect it to fall back a bit, possibly for quite a while before the next run. But we shall see!
In-N-Out Burger FTW! Congrats to holders though.
Was on the news last night and in all the papers - I wonder if that will flush out sellers or just entice more buyers.
From memory, Milford are the only fund holding a substantial amount, having bought from Roberts last year in the low $1 range. I wonder if they were drip feeding sell orders yesterday or if they were sitting on their hands counting their profits.
Happy my Kiwisaver is with Milford ....
http://www.nbr.co.nz/article/milford...fuel-bd-134160
This stock has bought a large smile to my face, even though the stock has got ahead of itself. This has made up for not investing in PEB or WYN.
My pick is that 3.15 will be the peak of this run; people will now lock in some of their profits which will see the price retreat to the mid $2 range. Now watch me be proved wrong :)
Does this prove the theory "every dog has its day"
More good news with the new store in Christchurch breaking opening day records and some fella called Mark trafficking burgers between the Nth Island and the Mainland and eating bastards for breakfast
What do people think of burgerfuel as a long term investment in the long run 5 - 10 years?
However, their goals seem a bit too optimistic too me.
Planning to open one thousand new stores in the next eight years..
"That's a big number, but potentially this partnership [with Franchise Brands] could help deliver this to us," he said. "It's certainly possible - if you crack the US market there's a thousand stores right there."
A thousand stores if they crack the states? Hmmm, a very popular burger chain in-n-out only has 290 locations and they've been around for more than 30 years... Not too mention, all the other chains, such as, johnny rockets, shake-n-shack, arbys, and so on...
With currently only 54 store in he world, even expanding to 500 stores worldwide in the next 8 years, will definitely have a much larger market cap than 150 mil. However, even at 500 stores I don't think will be an easy task even with franchise brands on board... Which is roughly 63 stores a year, that is some serious growth...
I dont think the 1000 is a target, more an aspiration goal. If they can co-locate with Subway, then it will be possible. Theya re also changing their model (no more regional franchisee) which will increase costs in the short term.
Until we find out what this deal actually means, i'd say todays price is a good price to sell. Remember that this company, doesn't own Subway, it owns 4 other brands you have never heard of. While it is owned by the subway founders, investment by them doesn't guarantee any face time with them.
Definitely Harvey, like taco bell co-locates with pizza hut in the states. However, like you mentioned, this company does not own subway, they were the founders, so how will burger fuel co-locate with subway? Plus, why would subway want to diminish their earnings and share it with burgerfuel? They are already the largest food chain in the world..
Right now, its more like an easier path for burger fuel to 'get their foot in the states' with the help of these founders..
Been a bit quiet here.
Well they made it into the NY Times: http://www.nytimes.com/2014/05/12/bu...sbusiness&_r=0 Articel by a Kiwi Freelancer from what I can tell but it did appear in Print.
Plus they have opened their first store in Egypt.
Shareprice at 2.25 and looks to be on a very very slow downwards trajectory.
Jeez re 256,000 fast food stores in the USA. Good luck to BF. Great point of diff is the healthier lower fat food choices with great tasting vege burgers too. Im even prepared to eat their frys.
You REALLY need to come to auckland moosie.. they are FAR from best in class. Gourmet burgers seems to be taking over from mexican as the new 'in' food up here, and I for one welcome our new burger overlords
Big J's is in my opinion the best in auckland - they've been voted best in auckland by Concrete Playground (my friend writes for them) and another award too. They do a different burger of the week each week, here's some of the better ones from the past..
https://fbcdn-sphotos-b-a.akamaihd.n...53694127_n.jpg
https://fbcdn-sphotos-f-a.akamaihd.n...49608152_n.jpg
https://fbcdn-sphotos-e-a.akamaihd.n...73418328_n.jpg
They might be a little smaller than burger fuel but still leave you feeling full, and at around $10 for a burger is better value for money imo.
I've been hearing great things about burger burger in ponsonby also http://burgerburger.co.nz/
Aside from these more specialty/gourmet ones, in terms of more chain style a la burgerfuel I would take Handmade Burgers in kingsland, Murder Burger in ponsonby and Burger Wisconsin over burger fuel any day.
I don't mean to say burger fuel are bad by any means, they make a good burger but in terms of quality/price/freshness, I don't think they deserve the hype they get without having tried some of the other options!
Lots of good mexican up here also.. mexico would be my go-to for cheap, fast mexican - awesome in a group as you can get a bunch of dishes for sharing/try a whole lot of things without spending too much - good mojitos too! but there's heaps of other good places also
Burger Fuel in the Dalma Mall was full to bursting on Saturday afternoon.
I don't think that NZ is going to be where they make their money . . .
hahaha the chard episodes were so good.
Sorry, last off-topic post from me about burgers I swear :P, I mentioned the concrete playground reviews - my friend has done another burger writeup last week :)
http://auckland.concreteplayground.c...types=og.likes
Given the imminent IPO for Shake Shack (as detailed here: http://www.bloomberg.com/news/2014-0...valuation.html) expected to price the company at 50 times earnings, and other similar companies listed in the article trading at about 60 times earnings, what is the current outlook for BurgerFuel? Admittedly, Burger Fuel currently has a P/E of about 320 but that should (hopefully) fall to something much more reasonable with their next profit announcement.
Burger Fuel are working on a plan for world domination but what are the chances of them succeeding? The article highlights a lot of competition around the world in the same space (with Shake Shack being a player in Abu Dhabi just like Burger Fuel).
I like where they are going but the SP seems to be rather over-priced for where they are now but potentially significantly under-priced if their plan for world domination has any legs.
Comments?
Agree
The only way to grow is to open more stores. Simple as that.
Edit: note it is still very illiquid with Roberts owning over 70%. Even if the Subways guys do increase their shareholding, liquidity wont increase as then it will just be tied up between more big holders.
Have tried burgerfuel, in and out, johnny rockets, shake shack and etc, shake shack takes the trophy for me...
I don't see burgerfuel cracking it in the states that easy. Burgerfuel has done quite well in middle eastern countries because it is halal, whereas, all the other burger chains are not. The competitor advantage burgerfuel has over other burger chains in middle eastern countries.
Burgerfuel is not bad, but I would put johnny rockets, and a few other ahead of burgerfuel, however, a lot of my gf's flight attendant friends who have travelled to NZ have loved burgerfuel too, but still prefer shake shack over it.
Update from Burger Fuel
Quote:
BurgerFuel Worldwide (BFW) has announced plans to open five more franchised restaurants in Australia, anticipating that these will open prior to 31 March 2015. The company has confirmed that new locations have been secured in Sydney, the Gold Coast and Brisbane, with additional sites currently under consideration. All restaurants will be operated under franchise by either new or existing BurgerFuel franchisees.The news closely follows the opening of the most recent BurgerFuel restaurant in Australia, located in Western Sydney’s Blacktown complex, which has performed exceptionally well in its first month of trade.
General Manager of BurgerFuel Australasia, Craig Notman, comments, “It’s great to see BurgerFuel Blacktown going so well - results like this show us that there is keen demand in the Australian market for BurgerFuel. We’re thrilled to have secured some fantastic sites in such busy, dynamic locations”.
BurgerFuel Group CEO, Josef Roberts, adds, “Although our biggest project is the upcoming expansion into the US, our Australasian project team is focusing heavily on the Australian market, where we see lots of opportunity for BurgerFuel”.
“We’ve always said that finding the right operators is integral to our success, and our Subway relationship has been instrumental in connecting us with great franchisees who share the BurgerFuel vision. We’re looking forward to developing a sizeable footprint throughout Australia over the coming years”.
BurgerFuel Worldwide has said that they expect to release updated details on the timing of its US entry soon.
BurgerFuel Worldwide (BFW) is a New Zealand gourmet burger concept and is listed on the New Zealand Stock Exchange (NZAX). BurgerFuel shares are currently trading at $2.85.
They tried Aussie before what's different this time?
Very crowded market. If they get a nice piece of real estate I suggest having 1 store to see how it goes. Not going to be easy.
They hav had one store for a while, and have just openned another which is apparently going very well.
You also have to remember that these are franchises so the risk falls on the franchisee. The Franchisor continues to earn their 10% of sales, plus mark up on stock not sourced externally (ie. the sauses are from BurgerFuel HQ) even if the store makes a loss.
Further update: http://www.nzherald.co.nz/business/n...ectid=11347321
Burger Fuel has had a nice increase in share price. It recently announced they will be soon releasing details for entry into US market
I'm not sure that RBD is a good comparison.
RBD is a licensed/franchised reseller of someone elses brand, whilst BFW is a brand which is licensed/franchised to someone else.
They seem to be going in opposite directions, if you catch my drift.
Possibly a better comparison would be ATM or PEB - taking NZ IP to the world ! ! ? ! ?
The share price is getting ahead of itself, but I agree with GTM 3442 it is not good comparison between Restaurant Brands and Burger Fuel. I see Burger Fuel being a good dividend stock in about 3 to 5 years. I bought into the stock back in 2010 and believe it does a great future, but execution of their plans has taken longer than I expected.
Things are on the up. At least 4 stores in the process in the SI. A handful of franchises signed up for Australia (some multiple). But the only get 6% of sales (plus 5% for advertising) so this alone doesn't justify the shareprice and are all things they should have done a couple of years ago.
The price suggests good news out of US but volumes so low that it is probably uneducated guessing. US will be hard (ice to Eskimos situation).
Not new competition but a new owner will surely try to grow them a bit : http://www.stuff.co.nz/business/indu...rger-wisconsin
Will also get headoffice/buying synergy's from the combination of two brands.
I remember them from before BurgerFuel times and thought their burgers had better flavour. my local has since disappears so it would be 10 years since I have had one and BurgerFuel has definitely improved since then.
That's easy to change. Mexicali open for lunch.
How does the taste, quality, price, atmosphere compare?
Burger Fuel's future lies in the international arena, mainly the Middle East at the moment. New Zealand competition is essentially irrelevant.
And the overseas market is big enough to swallow either of them.
Shake Shack, anyone?
Burger Wisconsin is no competition whatsoever. I personally rate their burgers as crap. Burger Fuel make excellent burgers.
Don't hold either company/no interests. Just like to think I know a good burger.
The middle east doesn't strike me as the smartest of stable areas to invest my hard earned cash in. Maybe northern africa may prove more enduring ?
-dodgy
Discl: No current holding
Hi Harv,
To date I have seen one "master franchise" mothballed - great model although low $ risk to the company except for reputation . And if you are prepared to wager anywhere in the region, Uae, Egypt, even Saudi etc. will be stable within the next 5 years - you are a braver man than me and by all accounts our illustrious leader.
-dodgy
BFW has been on a fairly slow but constant slide for the last 2 months, with little attention, despite the regular 'new store' announcements. Are people;
-Getting tired of waiting for the 'near future' US expansion announcements.
-Suspecting things aren't progressing as smoothly as hoped
-Tying to push the price down before making a big top up prior to the US announcement
-Other??
It appears things are still ticking along in the background. Still waiting for the big announcement though.
https://www.nzx.com/companies/BFW/announcements/264426Quote:
BurgerFuel CEO, Josef Roberts, comments, “Opening two stores in two different countries on the same day is quite a milestone. Exercises like this help us to prepare for the higher volume of growth that is ahead of us. While our preparation for entry into America remains very much a focus for the business, our teams in our existing markets are working hard to constantly expand the BurgerFuel footprint”.
Entry is on the way!
https://www.nzx.com/companies/BFW/announcements/265208
Searching for a site, i wonder what city they will chose first.
Once the site is chosen the store should not take that long to fit out etc?
Price of share should build with this excitement, but lack of share liquidity isn't helping
$0.62 jump in one day. Apparently people are pretty confident this is it.
Its more than just confident that this is it, the point is THIS IS IT! They have the partnerships and they are ready to open shop in the US, they will need a few months at least to fit things together for a shop opening, but I think they have already done the due diligence on supply centres and ingredients. Eight year target and 1000 stores COME AT ME BRO!