Fast Food Stock Review: Burger King Going Public (Again)

Fast Food Stock Review: Burger King Going Public (Again)

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In two or three months you may see a familiar name on the New York Stock Exchange: Burger King. That's right, it's coming back. (STAY AHEAD OF THE CURVE: Follow Kapitall on Twitter)

The world's number 2 hamburger chain, and number three fast food company (behind McDonald's and Wendy's) should reappear on the exchange within the next three months, according to the company.

A Brief History Lesson

Burger King has a long and complicated history of being bought, sold, and spun-off from various enterprises. Skipping ahead, it was an equity group comprised of Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners that first took the company public in 2006 before it was bought by 3G Capital and made private again in 2010. Then things went quiet for a while.

But not for long. In a deal announced late Tuesday, 3G Capital said it is selling a 29% stake in Burger King for $1.4 billion in cash to Justice Holdings Ltd., a London-based shell co-founded by William Ackman, specifically set up to invest in another company. 3G Capital will keep the remaining 71%." (via Huffington Post)

Justice Holding, which completed its initial public offering just 14 months ago, will then transform itself into Burger King Worldwide Inc, and its shares will be traded on the NYSE.

Triumphant Return?

The company is in the middle of overhauling their menu by adding smoothies, frappes, wraps, salads, and generally copycatting a lot of the moves other fast food retails have made to reinvent themselves.

According to Justice Holding, many investments were considered before it settled on Burger King, a decision made because "of its strong heritage and the "aggressive transformation underway" in North America."

Justice co-founder William Ackman believes the stock will be worth between $17-$18 per share. Justice shares were immediately suspended after the deal was announced late on Tuesday.

Business Section: Investing Ideas

Is Justice making an extremely risky move? Or are they onto a good thing?

To help you decide we looked into the fast food industry stocks currently trading on the U.S. exchanges. You can use Kapitall's tools to compare changes in their returns and analyst recommendations over the years.

Use this list as a starting point for your own analysis. What conclusions can you draw from this data?

 

Compare average analyst recommendation:

 

Compare monthly returns:

 

Compare number of employees:

List sorted alphabetically.

 

 

1. Chipotle Mexican Grill, Inc. (CMG, Earnings, Analysts, Financials): Develops and operates fast-casual, fresh Mexican food restaurants in the United States. Market cap of $13.04B. The stock is a short squeeze candidate, with a short float at 7.83% (equivalent to 5.22 days of average volume). The stock has gained 50.% over the last year.

 

2. Dunkin' Brands Group, Inc. (DNKN, Earnings, Analysts, Financials): Operates, and franchises quick service restaurants worldwide. Market cap of $3.63B. The stock is a short squeeze candidate, with a short float at 6.57% (equivalent to 6.91 days of average volume). The stock has gained 0.% over the last year.

 

3. Domino's Pizza, Inc. (DPZ, Earnings, Analysts, Financials): Operates as a pizza delivery company in the United States and internationally. Market cap of $2.09B. The stock has gained 110.52% over the last year.

 

4. Jack in the Box Inc. (JACK, Earnings, Analysts, Financials): Operates as a restaurant company that operates and franchises Jack in the Box restaurants. Market cap of $1.03B. The stock is a short squeeze candidate, with a short float at 8.21% (equivalent to 9.87 days of average volume). The stock has gained 4.13% over the last year.

 

5. McDonald's Corp. (MCD, Earnings, Analysts, Financials): Operates as a foodservice retailer worldwide. Market cap of $99.29B. Relatively low correlation to the market (beta = 0.43), which may be appealing to risk averse investors. The stock has gained 30.95% over the last year.

 

6. Papa John's International Inc. (PZZA, Earnings, Analysts, Financials): Operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States. Market cap of $904.28M. Relatively low correlation to the market (beta = 0.6), which may be appealing to risk averse investors. The stock has gained 18.04% over the last year.

 

7. Sonic Corp. (SONC, Earnings, Analysts, Financials): Operates and franchises a chain of quick-service drive-in restaurants in the United States. Market cap of $452.91M. The stock has lost 16.05% over the last year.

 

8. The Wendy's Company (WEN, Earnings, Analysts, Financials): Operates as a quick-service hamburger company in the United States. Market cap of $1.95B. The stock has lost 0.6% over the last year.

 

9. Yum! Brands, Inc. (YUM, Earnings, Analysts, Financials): Operates as a quick service restaurant company in the United States and internationally. Market cap of $32.26B. The stock has gained 43.04% over the last year.

 

 

(Written by Rebecca Lipman. Data sourced from Finviz.)

 

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One Response to “Fast Food Stock Review: Burger King Going Public (Again)”

  1. Jason Flumm says:

    It will be up to the new owners and management whether this venture fails or not. One thing's for sure – the already have all the equipment, ingredients, and meat to succeed.

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