Restaurant Brands International (QSR.TO)

Thinks 3G is over hyped. MCD-N has a lower PE in comparison. He thinks it is a speculation. Prefers Yum Brands. THI-T was a cleaner story.

Restaurant Brands 6%, April 1, 2022. Tim Horton’s and Burger King. A lot of debt. Management did a great job of taking out costs in previous companies so thinks they will do it again. Berkshire put capital into the preferreds at 9%, but he is lower in the capital structure.

Thinks this has been overhyped. A very highly levered company, which also concerns him. This is not the type of stock you want to own when markets are at all-time highs.

Long on McDonald’s (MCD-N) and Short on Restaurant Brands (QSR-T). Good strategy? He could see intuitively how it could do well, but he would advise against it. McDonald’s has a lot of headwinds. It is not seen as a health conscious menu and a place where people go eat healthy. This company has Tim Hortons which has a lot of growth potential and a lot of potential for cost-cutting.

This was the old Tim Hortons along with Burger King. He doesn’t see as much upside at this level and is going to wait and see how the next couple of quarters pan out. They are leveraged to a turnaround here.

He likes to buy things early. They have spent a lot of money and dedication in taking Tim Hortons global, as well as Burger King itself.

Feels there is a lot more risk in this than there was before. Burger King bought this at a pretty high valuation and they have to be able to justify this at generating earnings off of it. There is always risk in any merger. Thinks the Burger King model did not have as much growth built in as Tim Hortons’ did.

Shareholders approved the Burger King (BKW-N) takeover. If he owned, he would take his money and run. You don’t want Burger King interests here.

The takeover by Burger King (BKW-N) was approved today. Tim Hortons will be delisted and you will get stock of the new company. Burger King is owned by a private equity firm, which has the reputation of cutting costs quite aggressively. She would sell it here and find something else in the consumer space.

The buyout is at $88.50 and the stock closed today at almost $97. The $88’s if you just took the cash, but there is a share and cash option. In his analysis, Burger King (BKW-N) has not been the greatest operator. Their balance sheet is not exactly pristine. He feels that maybe you should be out the window at some early date.

You should just sell it now and move on. They are being acquired by BKW-N.

Pretty fully valued at this point and will be a different animal you own going forward with the Burger King acquisition. The company is continuing to do a great job, but penetration has gotten as far as it can in Canada. Growth has always been a little more difficult in the US. Consider taking some money off the table and look for something else or sit on the cash.

He is confident the deal will get done. This is a great business. He sold it, but was upset because it was a great business. He wants to see more evidence of what management is going to do now. There is a great opportunity to take this brand global. The US business has not been generating the return they thought it would. He is now interested in DOL-T.

He is so upset that they are getting taken over. He sold out a few weeks ago. Does not want to hold it in a leveraged buyout. He signed up to buy Tim Horton’s, not Burger King. Think carefully before you decide what to do. There are much more risks in this story than there were.

The merger will be in Canadian funds. Trading at a discount for the time value of money. There is still a little bit of uncertainty. Would be a buyer of this unless it falls.