MTY Food Group (MTY.TO)

(A Past Top Pick on January 12, 2017, Down 1%) Food courts. They brought Thai Express to the States, but it didn't take off. They also bought Imvescor Restaurant Group that he didn't like and sold his shares. He saw an overhang with mall traffic and wasn't impressed with same-store sales.

(A Top Pick Jan 12/17, Up 14%) He recently got out because he found a better opportunity. He does not see expected returns getting much higher. He decided to exit. It’s a well run company. Everyone likes Thai Express.

Relatively under the radar but one of the top performing companies on the TSX over the last 10-15 years. They went thought a period of consolidation and broke out on the announcement of an acquisition. They have a nice dividend. They have 55 brands. (Analysts’ target: $51.38).

(Market Call Minute.) This operates a number of different fast food franchises in food courts. He likes it longer-term. It has had a bit of a run and he would be a buyer on weakness.

Management team is quite strong. They’ve done a really, really good job of growing the company. Did some fairly large acquisitions recently, so the debt profile has changed and there is a bit more risk. The real story is that same-store sales has been flat to slightly falling over the last few quarters. Likes the name, but until same-store sales start to pick up, he wouldn’t be too interested. Priced at a premium right now.

One of the best performing stars on the TSX over the past 10 years. Owns a bunch of food court franchises, and are a consolidator in that space. Very consistent ROE generators. This is one of those stocks that completely flies below the radar screen.

He has looked at it numerous times and balked at it each time. It is a little expensive for a food corp. business. He is playing the space through another one. Wait for a pullback (10-15%) before getting into it.

He loves the company and management team. Bought this at $1.65 and sold it in the $30s. The stock treaded water for a while. They’ve done a great job of acquiring and integrating, however it is a very competitive industry. Most food service stocks are showing negative same store sales growth. Made a big acquisition in the US, which was what drove the stock higher from the $30s into the $40s. Quite expensive at these levels. Prefers others.

A quick serve restaurant company. Made a great acquisition for about $310 million US which gives them a new platform to try some of their concepts in the US. It further diversifies the business, and allows them to continue to grow earnings. For the last decade, they’ve added new brands and new acquisitions every year, and have done a really good job of it. Trading at about 12X EBITDA. Dividend yield of 0.96%. (Analysts’ price target is $49.75.)

(A Top Pick Nov 22/16. Up 0.16%.) This is for the long-term, and it has only been a few weeks since his recommendation. A lot more Canadians should take a look at this. When you walk through a food court, almost half of the brands are part of this company. They generate a tremendous return on capital very consistently, and are expanding worldwide. It is still a small-cap company.

A food franchisor. An unbelievable company. ROC is very high. Dividend yield of 0.94%. (Analysts’ price target is $47.67.)

Lots of familiar brands. It is a great company. Return on capital is off the charts. They have been growing around the world.

Fast food franchises in the malls. They’ve made an acquisition to increase their US presence. Excellent operators. Probably a nice, long term growth story.

He can never get comfortable with the investment. The brands they acquired are second or third tier franchises. They have no high barriers to entry. Great CEO with good capital allocation. They have no experience in the US. He would not buy at this value.

This had an enormous jump up today. They were doing a game changing acquisition. He trimmed part of his position today. His view is to trim it, and if it comes off and buy it back.