MTY Food Group and Alimentation Couche-Tard are two of my biggest and oldest holdings (if we exclude the fact that I've been in and out with MTY).
Their latest results were great. Their balance sheet has always been good or great. Their management has always been great. But they've had some slump periods. And in these periods, some people have lost faith. Because they expected a stock that would always go up, like a never-ending growing erection. I don't know for you, but, for me, the only "never-ending growing erection" stock that has worked is Constellation Software. So, that kind of stock is pretty rare and usually, they're a fucking scam (like Valeant).
And even if they surged these last days, I believe that they're still some of the best occasions on the market right now. You have everything you're looking for if you're an investor like me. So, even with their rise, they're a better buy than at least 80% of the market.
Some people fear that Couche-Tard will be hurt badly by electric cars or driveless cars. It's perhaps a threat, but a long time threat (and I've already written about that).
But, for MTY, I'm curious:
Are there any people coming here believing that MTY won't be at least twice as big as it is now in 5 years? I'm almost sure about that. And there is very little stocks about which I have such a strong feeling. So, please, in the comment sections, tell me your vision about the future of MTY.
For me in Ontario the concern was the rise in minimum wages leading to higher prices and fewer visits as well as a long term decline in mall traffic so I took profits. I bought into Imvescor for a while because of their CEO and dividend at the time but sold out about 4 months too early before they got bought out by MTY. I think Frank Hennessey is now with Recipe Unlimited.
RépondreSupprimerDoes anyone use UberEats or Grubhub? I asked a place outside of Boston and they said Grubhub is really popular. I just can't justify paying for delivery of takeout but that doesn't mean others won't. This might benefit MTY. Mucho Burrito is in my top 3 places to eat.
So Grubhub.. should have invested in that one.
SupprimerSo 2 years ago I was debating on either buying MTY or Premium Brands Holdings (PBH). Both are in the food industry with PBH specializing in deli products, meats,sandwiches etc for places like Starbucks, gas stations, etc.The company owns tons of brand names. After a bunch of DD I chose PBH, although MTY looked great but I did worry about the mall traffic concerns. In the 2 years since PBH has gone up roughly 100%, while MTY only 33%. If we look further out at 5 years PBH is up 491%, while MTY is up 85%. 1 year time frame is about even. PBH pays a 1.70% DIV vs MTY's 1.22%. Expected growth in earnings is higher for PBH. I do like MTY's growth in the last year. ROE,ROIC,ROE are a bit better in MTY now with its recent growth.Its growth in most metrics is impressive since 2017 but before that its a bit up and down as Penetrator mentioned. So my question for you all is with PBH outperforming MTY over every time frame why buy MTY over PBH? Serious question. Yes, I agree Stanley Ma is a stud.
RépondreSupprimerI sold MTY at $39.32 way back, OUCH! I sold ATD-B at $63.54
RépondreSupprimerBoth great companies that in 5-10 years will be much higher. When you see charging stations at the highway rest stops then that will signal mass acceptance. I worry about malls more than electric cars. Who knows!
The underground food courts in big cities are and will be ultra crowded. Too many peoples don’t bring their lunch at work
SupprimerWith a 15-20% of margin and their efficient capital allocation, I see MTY at least twice as big in five years.
SupprimerAlso, the major point to keep in mind for MTY is that they are present in the US. MTY has a high ceiling.
Despite of this, a lot of investors are snobbing this company
You are well on your way to becoming Warren Buffett with your oldest and dearest holdings. You will wake up one day and see that you own the equivalent of the Washington Post newspaper, Coca cola (ten teaspoons of sugar) and Capital Cities ABC (from 3 major networks to hundreds of channels and netflix).
RépondreSupprimerMTY and Couche Tard always leave me feeling like they are making fun of their customers. I always enjoy some junk food from a food court seasoned with rat or cockroach droppings. The only thing better is paying twice as much for a bag of chips or a chocolate bar because I'm too lazy to buy them at a dollarama or supermarket. More power to the businesses that make money taking advantage of the poor, lazy and stupid. But the days of gas station convenience stores and busy shopping malls full of shoppers who will eat Franx Supreme hot dogs and Tiki Ming fast chinese food may be numbered. More shopping will be done online instead of in shopping malls. Eventually the electric cars of tomorrow will result in less stops at couche tard to gas up and buy assorted crap at twice the price. We'll always have our memories...like the time my girlfriend told me to pick her up a small package of skittles and I walked away shaking my head when I realized that the vending machine at work sells for less than couche tard. lol
Guys, I do not mean to be making fun of your stock picks, but this is what it comes down to. Let's propose a stock picking contest.
RépondreSupprimerMTY & Couche Tard vs Amazon & Dollarama
MTY relies on the shopping mall / Amazon is the destroyer of brick and mortar shopping malls.
Couche Tard prides itself on selling you chips and chocolate bars for twice the price of the supermarket. Dollarama sells for even less than the supermarket or walmart. Who do you suppose will win out in the end?
MTY + Couche Tard vs Amazon & Dollarama.
you think you have the value picks, but moving forward, your mty and couche tard will not command much of a p/e multiple. There's a reason for that. Amazon looks outrageously expensive. It comes with the territory when your stock moves from $2 to almost $2,000 in twenty years.
p.s. Constellation Software is money in the bank. What could be more important than the specialized software that allows you to run your business efficiently? They will keep kicking butt.
NO pick 2 Cdn listed stocks. That's an apples to oranges throwing in AMZN c'mon man!
RépondreSupprimerIf you want two great Canadian companies then you have to go with Constellation Software and Dollarama. Their ROE is just off the charts.
RépondreSupprimerI said this on BNN but perhaps few paid attention or appreciated the comment... so I'll say it again here because you guys will get it. At the moment there are 27 companies in Canada that meet my criteria of cash ROE over 20% for at least 3 years in a row. When I applied this screen to the rest of the world, there were around 500 companies that met this criteria. I therefore tightened up the parameters and got the number down to 125 across the world. Of the 125 there were only 4 Canadian companies left standing: CSU, DOL, TOY & TC. I've sold MTY and reduced my position in ATD.b by half. They aren't bad companies. Penetrator says that ATD.b and MTY are better than 80% of the options in Canada... they are actually better than 99.1% of the options... HOWEVER they are not better than CSU, DOL, TOY, TC nor are they better than the 125 companies I've found across the world that hang with the likes of CSU and DOL. Not sure if this helps but might provide some context and perspective. Hope you're all having a nice summer, JDV.
RépondreSupprimerExcellent post JDV. And it really hits home how badly we handicap ourselves when we limit ourselves to just Canadian stocks. It's like the Montreal Canadiens limiting themselves to just head coaches and General Managers that are fluent in french. Do not handicap yourself, there's a world out there.
SupprimerAnd players that are not fluent in french....I Hope you are not serious or you simply don't get that all the OTHER team will limit themselves to an english staff. Just 50 years ago not much francophones were into managing jobs, think about it.
SupprimerOther hockey teams DO NOT limit themselves to an English staff. Claude Julien coached the Bruins for years. Jacques Lemaire was head coach in New Jersey years ago. Alain Vigneault has coached in places like Vancouver and New York for the Rangers. The Columbus Blue Jackets now have a General Manager who is from Finland. Stop and think of the advantages. Finland is a goaltending factory and also has some great young players...that this GM will hear about much sooner than any other coach.
SupprimerThe Montreal Canadiens have a culture of LOSING. They have a loser's mentality. It is not the fault of the owners. It is the fault of the fans and the journalists. Les Canadiens will struggle to make the playoffs and may not win another Stanley Cup for 100 years. This is what happens when you are only willing to access about 2% of the available TALENT POOL for head coaches and general managers. The same principle applies in stock investing. Go ahead and limit yourself to Canadian stocks only and you will struggle to achieve the same performance of others who have no problem buying U.S. stocks as well.
Maybe I'm wrong. Maybe my stock investing results would be better if I only invested in B.C. weed stocks or only invested in Quebec gold mining companies. Maybe Les Canadiens have a winning strategy and limiting themselves to GMs and head coaches that are fluent in french is the way to win.
The journal de Montréal had a funny cover story a little while back: the canadiens are investing in the future...and the future is (35 year old) Tomas Plekanec (back from the Leafs). lol. After the Edmonton Oilers, Montreal has the worst GM in hockey. But where will they find somebody as talented (LOL) to replace him?
Jason, how do you account for debt levels if you are just using ROE? Big fan of yours by the way.
SupprimerThanks Jason, you too:)
RépondreSupprimerOh my god, Vicario is still alive!
RépondreSupprimerI am not a fan of MTY. No organic growth. PBH is an equal or even better acquirer, innovator and has internal growth.
RépondreSupprimerIf a downtown food court is 98% leased up all of the time and food courts are selling fast food, outside of acquisition and some automation, how exactly do you grow YOY?