Daily Stock Opinions and Ratings

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Peter HodsonMTY Food GroupMTY.TOWATCHApr 15, 2015

A company that has really started to consolidate the fast food space. They are doing lots of deals in terms of the food courts. They are buying all these little companies, rolling them up and are doing very, very well. They keep raising their dividend. Their last quarter showed a little bit slower same store sales growth than what he expected. It wasn’t very impressive. Per share earnings were fine, but the next quarter has to be watched.

Peter Hodson

Unlock Rating

$33.75

Stock price when the opinion was issued

$33.23

As of Jul 24, 2026. Market Open.

food services

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BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Debt levels can be a concern. Operating cash flow stable. Management focused on cost cutting. Unlock Premium - Try 5i Free

BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Proven food consolidator in North America. Regained pre-pandemic sales levels. Trading at a good valuation. Geographic diversification. MTY can be defined as a network of restaurant and food brand names and has proven itself to be a successful consolidator in the industry. Unlock Premium - Try 5i Free

BUY ON WEAKNESS

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. They generate free cash flow and the valuation is fairly cheap now at 2.5x forward sales and 15x forward P/E. Liquidity is not great. If rates rise, the debt could become a problem and put pressure on their margins and balance sheet. Valuation is at historical lows and there is decent upside potential with good downside protection. Unlock Premium - Try 5i Free

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The current valuation is relatively cheap if the current rate of reopening locations is maintained. Debt to equity ratio is around 1.6 due to the pandemic. The positive trend should continue into summer and fall with further reopenings. Unlock Premium - Try 5i Free

PAST TOP PICK

(A Top Pick May 19/20, Up 171%) When the pandemic started, restaurants were shut down. This was one of the best performing stocks over the last 20 years and he got his entry point last year. They have years of growth ahead though consolidation and expansion.

HOLD

Top pick in May, up 161%. It is pricing in a nearly full recovery. It has run up to where it was. It is not an attractive buy today. He plans to hang on to it.

DON'T BUY

The king of the food court. Have you been at a food court lately? MTY is well-run, but carries a lot of debt to fund their acquisition strategy. Will be interesting to see how they will make food courts work during this pandemic. It's not reasonably valued, so maybe buy on weakness, but it's too uncertain for him.

DON'T BUY

Some companies rely on a COVID vaccine like this. He's concerned about demand in downtown cores, and the future looks uncertain, so there are investing opportunities in this area, including MTY which operates food courts. MTY has been on an acquisition streak, a strategy that works when times are good, but not when times are bad like now, leading to too much debt. Doesn't see dividend growth here.

BUY

It has considerable upside to get back to where it was. We should be less concerned now than we were when the economy was getting shut down. They say they are generating 80% of what they were previously by increasing prices, increasing turns, and there is greater activity on take out and pick up. This is his choice for investing in the recovery.

TOP PICK

They specialize in food court restaurants which is a troubled area because of the lockdown. But most restaurant stocks were down 50% but were already struggling before the virus. One exception was MTY. They've enjoyed a 25% EPS compound growth rate for the last 5 years, with postiive same-store sales in January and February. Yes, some operations are in hard-hit food courts and malls, but 60% of their locations are in the streets, not malls. They took on a lot of debt to buy a pizza chain, so the stock went down. If you believe people will return to fast food and that reopenings will be successful, then MTY is a buy. Pizza does very well in this climate. (Analysts’ price target is $27.29)

BUY

Today's news was good, because it broken a downward trend in a downward channel.

DON'T BUY

They've had a volatile 2019. They did a good job rolling up franchises, but that positive has been priced into the stock. Not a good-growth company; the restaurant space faces wage increases and food inflation.

PAST TOP PICK

(A Top Pick Sep 07/18, Up 7%) They are an acqusitions machine, buying fast food brands, inlcuding a big one in the past two years that he hopes would increase their margins. They're rebounding from a hiccup now, so things looks good. It will grow nicely and eventually pay dividends.

TOP PICK

A simple business, relatively cheap at 14x earnings. Likes the chart. If you buy stocks that are hitting new 52-week highs, they tend to keep doing it. Grow by acquisition, and they’re good at it. Can get a decent double-digit return without losing sleep. Yield is 1%. (Analysts’ price target is $60.33.)

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Peter HodsonMTY Food GroupMTY.TOWATCHApr 15, 2015

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