The chart above (Kona Grill) shows a 30% drop since the IPO over 6 months. I don't know much about that company. My feeling on Tim Hortons is that it is a growth company. They only have 280 locations in the USA but 2500 in canada even though it only had 1/10th the population of the USA. If Hortons one day had as many US locations per capita as they do in Canada, that means they would have 25,000 locations in the USA, which would be 89 times as many locations as their current size in the USA. There will certainly be growth in the USA, its just a question of how much, how fast, and if they will be able to maintain their high margins. After all, Hortons is the most profitable segment of the current Wendys business. As for comparisons to Krisy Kreme, I would hope there will not be accounting fraud taking place at Hortons. Also, they only make 10% of their profits on donut sales, they are much less exposed to diet fads than Krispy Kreme.
Of all the dumb things said on ET this just might take the donought. Most of Canada is addicted to Tim Horton Coffee. People drive way out of the way to wait in line to get it. I even think that you can buy the IPO because it will eventually get turned into an income trust with a ridiculous multiple. Sorry I hope I didn't lose the Yanks with all this Canuck jargon
Does the IPO include all of the Wendy's also ? I guess we would need to see the store counts, average store sales and the number of corporate vs frachised stores. In the US Wendy's is the big brand, and it is fairly strong right now, although it has slipped since Dave died...
The stock will be popular in Canada because everyone sees how busy the stores are there. However this is probably already factored in the price of the stock. In order for the stock price to increase the company needs to continue to grow. However the market for Tim Hortons in Canada is already saturated. The only room for growth is in the US. There are a few hundred franchises there now. I would be questioning how popular these American franchises are since they could indicate the future growth of the company. All you'd have to do is to visit a few American locations and see if they are as busy as they are in Canada.
Starbucks does have drive-thrus. They have been toying around with the concept for the past year or two but many of the new store openings have been drive-thru stores. Starbucks is also on their third round in trying out a lunch concept. This time they got it right and lunch sales are doing amazing at sbux stores. Tim Hortons will have to be able to fight the jaugernaut that is sbux. A bit of trivia starbucks has opened a store a week every week for the past 9 years in California. Jamaal
want to see a Canadian survey? http://www.ctv.ca/servlet/HTMLTempl...wsTopStories&hub=TopStories&subhub=VoteResult
The survey shows 65% of Canadians would buy Tim Horton stock. This probably means the stock will open high, go a bit higher, and then go into a period of decline because it is severely overbought. This is the most highly touted IPO of the year, even in the USA. Even Jim Cramer jumped on the bandwagon after he previosuly advised to stay away from it a few months ago. A better way to play it long term might be to wait until Wendy's dumps the rest of their stock on the market, and then buy some 2 year options LEAPS every 2 years for the next 10 years. I still think some of those 2 year cycles will be very good.