Author Topic: MTY - MTY Food Group  (Read 21831 times)

notorious546

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Re: MTY - MTY Food Group
« Reply #10 on: March 11, 2016, 09:37:23 AM »
MTY Food Group (MTY.TO)

Montreal-based MTY has consistently earned an ROE in excess of 20 per cent over the past decade. MTY operates a number of fast food restaurant chains in Canada, and with the stock having been in consolidation mode for the past year and a half, now trades on 12.5x 2016 earnings, which we think is very reasonable for a steady growth company with an unlevered balance sheet.

http://www.theglobeandmail.com/globe-investor/investment-ideas/three-top-stock-picks-from-donville-kents-jason-donville/article29070170/


notorious546

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Re: MTY - MTY Food Group
« Reply #11 on: May 25, 2016, 07:14:39 AM »
MTY announced acquisition of Kahala Brands

http://mtygroup.com/wp-content/uploads/2015/06/20160525-MTY-enters-into-an-agreement-to-acquire-the-shares-of-Kahala-Brands-v7.pdf

Quote
During the 12 months following the acquisition, the combined entity is expected to generate over C$90 million in EBITDA,
C$250 million in revenues and C$2 billion in system sales. The transaction is expected to be immediately accretive. The
combined entity will have a portfolio of approximately 5,500 stores under 57 brands

Quote
Total consideration for the transaction is estimated at US$300 million, satisfied by the issuance of 2,253,930 shares of MTY and
the payment of US$240 million in cash. The final purchase price remains subject to customary working capital adjustments. The
cash component of the consideration will be financed by MTY’s cash on hand and by the new credit facility that is presently being
arranged. TD Securities will act as the sole Lead Arranger and Bookrunner for a syndicate of lenders. The new credit facility is
expected to provide enough flexibility for MTY to complete additional acquisitions in respect of future opportunities that might
become available to MTY and continue to pay and adjust its dividend in accordance with its dividend policy.

frommi

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Re: MTY - MTY Food Group
« Reply #12 on: May 25, 2016, 07:28:15 AM »
Really interesting that this is flying under the radar, its still small, has compounded @20% for a long time and even after the merger its still available at nearly fair prices. Based on my calculation its value has gone up nearly 25% with the merger, so the jump in the stock price is warranted.

Liberty

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Re: MTY - MTY Food Group
« Reply #13 on: May 25, 2016, 07:58:11 AM »
Really interesting that this is flying under the radar, its still small, has compounded @20% for a long time and even after the merger its still available at nearly fair prices. Based on my calculation its value has gone up nearly 25% with the merger, so the jump in the stock price is warranted.

It is fairly popular among investors in Canada (or at least in the East), along with Couche Tard (ATD.B). Probably not that well known outside of the country, though.
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gary17

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Re: MTY - MTY Food Group
« Reply #14 on: May 25, 2016, 08:29:19 AM »
it hasn't done much over the last year so the share price has been 'cheaper' than some of the higher profile names like CSU .... on a pE basis.....   i have a small position and am glad to see this acquisition. 

not sure the acquired company has much debt - not much info provided.


Gary

frommi

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Re: MTY - MTY Food Group
« Reply #15 on: May 25, 2016, 09:07:49 AM »
it hasn't done much over the last year so the share price has been 'cheaper' than some of the higher profile names like CSU .... on a pE basis.....   i have a small position and am glad to see this acquisition. 

not sure the acquired company has much debt - not much info provided.


Gary

I was really lucky here, found it over the weekend while reading a book about 100 baggers which mentioned Donville. He profiled it in one of his latest letters. Because it is a dividend grower i was immediatly interested and after reading about the company for around one hour i built a 4% position yesterday. So my return on reading the book is already approaching several thousand percent. :)

Regarding the debt i assumed that the purchase price includes that and that MTY has ~290 million CAD$ in debt after the transaction.

Liberty

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Re: MTY - MTY Food Group
« Reply #16 on: May 25, 2016, 11:55:54 AM »
You built a 4% position after knowing the company for 1 hour? I suppose that's what's called firing from the hip. Glad it's working out well for you.
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frommi

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Re: MTY - MTY Food Group
« Reply #17 on: May 25, 2016, 11:57:34 AM »
It is fairly popular among investors in Canada (or at least in the East), along with Couche Tard (ATD.B). Probably not that well known outside of the country, though.

Thanks for dropping the ticker, i added ATD to my list. Looks like i should look more at compounders in canada.

frommi

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Re: MTY - MTY Food Group
« Reply #18 on: May 25, 2016, 12:09:03 PM »
You built a 4% position after knowing the company for 1 hour? I suppose that's what's called firing from the hip. Glad it's working out well for you.

What do you get out of the n`th hour researching a stock? I look up the history of the numbers in morningstar or gurufocus, think about the business (moat, etc.) for some minutes, fly over the annual report reading whats interesting to me and then add the numbers to my spreadsheet. After that i maybe read some SA articles or look if i find a writeup in VIC. Most of the time i know enough to pull the trigger after that. But with 4% positions i have room for mistakes and i mainly clone others, so my picks are already filtered.
I doubt that more information is helpful to make better returns, probably the opposite is the case. Its impossible to know what happens exactly in the future, so more information probably leads only to overconfidence.

Liberty

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Re: MTY - MTY Food Group
« Reply #19 on: May 25, 2016, 12:11:30 PM »
You built a 4% position after knowing the company for 1 hour? I suppose that's what's called firing from the hip. Glad it's working out well for you.

What do you get out of the n`th hour researching a stock? I look up the history of the numbers in morningstar or gurufocus, think about the business (moat, etc.) for some minutes, fly over the annual report reading whats interesting to me and then add the numbers to my spreadsheet. After that i maybe read some SA articles or look if i find a writeup in VIC. Most of the time i know enough to pull the trigger after that. But with 4% positions i have room for mistakes and i mainly clone others, so my picks are already filtered.
I doubt that more information is helpful to make better returns, probably the opposite is the case. Its impossible to know what happens exactly in the future, so more information probably leads only to overconfidence.

I think it's useful to know the industry dynamics, the management's approach, who the competitors are, any potential regulatory problems on the horizon, looking at the filings and transcripts, etc. But to each their own.
« Last Edit: May 25, 2016, 12:54:41 PM by Liberty »
"Most haystacks don't even have a needle." |  I'm on Twitter  | Interesting podcast on sleep science