YUMC

Best Idea Domino’s Has a Massive Growth Runway

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Image Source: Domino’s Pizza Inc – Third Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan Domino’s Pizza Inc (DPZ) runs a great business. Most of its store locations are franchised (~98% as of September 2021), meaning inflation cost headwinds fall more squarely on its franchisees. The company has put up great same store sales performance on both a domestic and international basis in recent fiscal years, and it continues to have an immense growth runway. Domino’s is a stellar generator of free cash flow, too, thanks to its asset light revenue model. We include shares of Domino’s as an idea in the Best Ideas Newsletter portfolio.  The restaurant franchise space is appealing because these companies have asset-light business … Read more

Best Idea Chipotle Mexican Grill’s Growth Runway is Enormous

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Image Shown: Chipotle Mexican Grill Inc’s restaurant level unit economics continued to improve in the third quarter of 2021, supporting the company’s growth trajectory. Image Source: Chipotle Mexican Grill Inc – Third Quarter of 2021 Non-GAAP Reconciliation Presentation By Callum Turcan On October 21, Chipotle Mexican Grill Inc (CMG) reported third-quarter 2021 earnings that beat both consensus top- and bottom-line estimates. Comparable restaurant sales grew 15% year-over-year last quarter as Chipotle’s e-commerce business held up well, with digital sales up 9% year-over-year (representing 43% of its total sales during this period), while customers resumed in-store dining activities in earnest. We liked what we saw in Chipotle’s latest earnings report. Shares of CMG are included as an idea in the Best … Read more

Chinese Stocks Getting Hammered

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Image shown: A confluence of factors are driving Chinese stocks lower, not the least of which is heightened regulatory concerns. By Brian Nelson, CFA The collapse in Chinese equities (FXI) (MCHI) during the trading session July 26 is a reminder (again) why you should consider combining momentum with *enterprise valuation* in stocks, as in the Valuentum process. It’s not enough for you to think a stock is undervalued or cheap. The market must agree with you, too. A falling stock price says the market disagrees. Our favorite ideas for consideration are always in the newsletter portfolios, whether the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, or High Yield Dividend Newsletter portfolio. We do not have any direct exposure to … Read more

Best Idea Chipotle Rockets Higher!

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Image Shown: We include Chipotle Mexican Grill Inc an as idea in the Best Ideas Newsletter portfolio. On July 21, shares of CMG surged higher after the firm reported a stellar earnings report after the market close on July 20. By Callum Turcan On July 20, Chipotle Mexican Grill Inc (CMG) reported second-quarter 2021 earnings that beat both consensus top- and bottom-line estimates. The company’s comparable store sales boomed higher by over 31% year-over-year as Chipotle’s customer base returned to its in-store dining offerings in the wake of coronavirus (‘COVID-19’) containment efforts getting eased across the US. Its digital sales were up almost 11% year-over-year and represented a little under half of its total revenues. Chipotle’s momentum is expected to … Read more

Domino’s Pizza Well-Positioned for Long Run

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Image Shown: Domino’s has the right business model for the long haul. Unit economics are fantastic for franchisees, while same-store sales continue to benefit from first-mover digital initiatives. Earnings per share growth has been stellar for the past decade. Image Source: April 2021 Presentation. By Brian Nelson, CFA It could be a Tuesday afternoon or a Friday night. It’s never been easier to have your order from Domino’s Pizza (DPZ) delivered to your doorstep. With a few clicks on the app, you can place your order, track the pizza from the oven through delivery, and even know the name of the driver – all within a matter of minutes. From the young family looking for something quick and easy to … Read more

Chipotle Could Double the Number of Restaurants in the Long Run

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Image Source: Valuentum By Brian Nelson, CFA “Letting winners run” is an important dynamic behind the concept of compounding, and it often makes having a long-term horizon necessary. I talk about how we think about “letting winners run” in the following video, “Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value.” Compounding returns is one powerful aspect of investing. That said, we can understand why it may be confusing to see us continue to highlight ideas in the simulated newsletter portfolios that may be trading above the high end of the fair value estimate range, but per the Valuentum methodology, we would only look to remove them when their shares start to roll over in a meaningful … Read more

Chipotle Improving Its Digital Menu to Support Its E-commerce Growth Runway

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Image Shown: Over the past year, shares of Chipotle Mexican Grill Inc have been on an upward tear, supported by the restaurant’s improving omni-channel selling capabilities. By Callum Turcan Shares of Chipotle Mexican Grill Inc (CMG) surged higher during normal trading hours March 9 after the firm announced it was adding customizable quesadilla offerings to its digital menu in the US and Canada starting March 11. This offering is only available for customers ordering while using Chipotle’s digital platforms (potentially due to the longer preparation times) and will likely require new cooking equipment at the company’s restaurants. The company offers both home delivery and curbside/drive-thru pickup services (including its order ahead and pickup services) through its digital platform. We continue … Read more

Chicken Sandwich Wars Heating Up In the US

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Image Shown: Rivals in the quick-service restaurant space are aggressively competing for share in the fast-growing premium chicken sandwich category following Popeyes’ considerable success the past couple years. Source: Images/logos property of the respective companies. By Callum Turcan and Brian Nelson, CFA Nothing has been the same in the fast-food industry since Popeyes launched its first nationwide chicken sandwich August 12, 2019. The release of the delicious chicken sandwich from the company named after Gene Hackman’s character Popeye Doyle in the 1971 film The French Connection may even have changed the fast-food industry as we know it. Popeyes’ “tender all-white meat chicken breast fillet, marinated in (its) authentic blend of Louisiana seasonings, then hand battered and breaded in (its) all … Read more

McDonald’s: Holding Up Well During the Pandemic

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By Brian Nelson, CFA Nothing seems to be able to stop McDonald’s. Remember the documentary Super Size Me (2004)? For those that may not have seen the award-winning film, director Morgan Spurlock filmed his experiences eating only McDonald’s food three times a day for a 30-day consecutive period. He made a point to eat every item on the menu, and if memory serves us well, anytime he was asked to “Super Size” his meal, he had to oblige. The documentary measured the effects of eating only McDonald’s food on his health in just this short period of time. During his McDonald’s-binge, Spurlock consumed an average of 5,000 calories a day, roughly twice that of a healthy diet, and he ended … Read more

24 in a Row! Order the Exclusive Today!

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Image Source: An excerpt from the March 2020 edition of the Exclusive publication. Valuentum offers commentary across the capital stack in the Exclusive publication. In the Exclusive publication, Valuentum highlights three new ideas each month to consider, one for income, one for capital appreciation, and a “short” idea consideration (all three outside our existing coverage universe). Fresh, underfollowed and new ideas — outside our coverage universe — every month! Nothing is held back.  Big Winners Backed by In-Depth Theses Since the monthly Exclusive was first published in July 2016, Valuentum’s mission with the publication has been to produce an unmatched newsletter that delivers ideas with high success rates and ones backed by in-depth theses across the three key themes: income, … Read more