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By Iain Butler
Chief Investment Adviser,
Stock Advisor Canada
Dear Fellow Investor,
Imagine if you had invested in McDonald's in the 1960s … or Starbucks in the 1990s ...
How much money could you have banked by getting in before the crowd? Thousands? Tens of thousands? Millions even?
Well, if you missed out on these life-changing opportunities, don’t worry.
In just a moment, I’ll discuss what I believe is one of the best opportunities for Canadian investors this year—a rapidly expanding franchise company with the potential to make you a small fortune.
The Canadian company I’m talking about has outperformed Starbucks by more than 10 times over the past decade! It’s already seen the value of its stock skyrocket from 65 cents a share in 2004... to $5 a share in 2008... to a high of $32 today – an eye-popping 4,800% gain in less than 10 years.
That’s enough to turn every $5,000 investment into $245,000 in a decade... and every $20,000 into $980,000.
And here’s what is truly exciting. It’s just getting started.
The company I’m talking about is cashing in on the craze for “Quick Service Restaurants” (QSR) here in Canada—the franchise trend that has already built a $21.7 billion industry just in Canada alone.
The newer QSR establishments are light-years beyond the old fast-food chains with which most Canadians are familiar—the venerable Tim Hortons or New York Fries.
They are niche operations that serve hearty, unique ethnic foods for hungry people in a hurry—such as workers on their lunch breaks.
Like Starbucks, these restaurants are popping up like mushrooms at every mall and downtown in Canada.
And the profits are simply staggering!
A unique company in a fragmented industry
poised to grow your investment many time over
Now, if you’re a skeptic like me, your first reaction may be to doubt that a business like this is worthy of your hard-earned investment dollars. And if I hadn’t already done my research, I’d be skeptical, too.
Here’s the thing—according to statistics provided by the Canadian Restaurant and Foodservices Association, Quick Service Restaurants lead all other types of restaurants for sales revenue in Canada. Even better, this portion of the market is growing at a much faster rate than the more traditional full service restaurants (see nearby chart).
In other words, there’s a nice little tailwind behind this entity that it’s poised to take advantage of.
The company I am profiling is in the business of creating and marketing these franchises and, of course, pockets a nice chunk of the revenue.
And as this industry expands, the company I’m talking about is perfectly positioned to cash in—providing you with an opportunity to multiply your investment several times over during the next 5-10 years.
I’ll tell you more about this outstanding opportunity in a moment. But first, allow me to introduce myself …
I’m helping investors profit from the
best Canadian and U.S. stocks
My name is Iain Butler. You might be wondering why I’m willing to give you such a great stock tip like this.
The reason is simple. I’m the chief investment adviser of Stock Advisor Canada, the flagship publication of The Motley Fool organization here in Canada.
I want to tell you about some great new investment opportunities in Canada so that you might consider trying out Stock Advisor Canada on a risk-free basis. We’re Canadians writing about investment opportunities for Canadians and our goal is to help you make a pile of money in 2014 ... and beyond ... beginning with a stock that I believe has the potential to multiply your money many times over.
You know, it wasn’t so long ago that we Canadians weren’t allowed to have more than 30% of our registered retirement savings (i.e., RRSP) allocated to non-Canadian holdings.
Fortunately, the federal government came to its senses and, in early 2005, a monumental event occurred for Canadian investors: the stringent rules on foreign stock holdings were lifted!
Abolishing the 30% threshold on foreign holdings did more than just open up our retirement savings to a world of investing that we’d previously been (partially) sheltered from.
It really changed the way many of us thought about all of our investment accounts, registered or not. We had to carefully consider what the proper mix of Canadian and foreign (and especially U.S.) shares should be.
Investors Can Bag Gains as High as
2,091% in the Right Canadian Stocks!
Unfortunately, in the rush to diversify our stock holdings many Canadian investors overlooked some spectacular investment opportunities right here at home!
For example, Valeant Pharmaceuticals (VRX), the Laval-based manufacturer of dermatological and neurological products, has seen its shares do a moon shot from $14 a share in early 2010 to a high of $145 in February 2014—a blistering 948% gain in just four years.
Or take Magna International (MGA), the automotive supplier headquartered in Aurora, Ontario. It shot up from a split- and dividend-adjusted $12.82 a share in 2009 to the mid-$80s this year as sales hit $25.66 billion for the first nine months of last year.
That’s more than 5 times your money in about five years!
Just imagine: If you had ponied up $10,000 on Magna International and forgotten about it, you could have woken up five years later with an extra $60,000 in cash.
And then there’s Catamaran (CCT), the nearly $12 billion Canadian health-care company.
It was selling for just $2.60 a share in 2006... but has jumped all the way to $56.97 a share.
That’s a 2,091.15% return on your money: more than 20 times!
Do the math: You could have made a $10,000 investment and, in about 8 years, walked away with as much as $219,115 in cash.
There have been a lot of other great Canadian stocks that have made investors handsome profits over the past year or two, including...
... Canadian Pacific Railway (CP)... which jumped 60% a share in 2013...
... CGI Group (up 55% in 2013)
... Gildan Activewear (up 57% since early 2013).
But frankly, I’m not here to tell you about what happened yesterday.
This special investment alert isn’t about recent history. Rather, it’s about what I believe to be...
One of the Best Investments
in Canada for the Coming Years
One thing you can count on in the restaurant world is there will always be a new trend. It may start small, but eventually it gathers steam and becomes a mass market phenomenon.
When that happens, consumers line up in droves to eagerly spend their money. That’s what is happening right now with a new generation of high-quality “ethnic” quick service restaurants all across Canada.
The amount of money being spent by consumers on this fast-food revolution is remarkable. And as long as the Canadian economy continues to move ahead, consumers will continue to spend money eating out. In growing numbers, they’re choosing to spend it in these high-quality, very niche specialty restaurants.
Of course, consumers
always spend liberally
on inexpensive, delicious food.
It’s nothing new for Canada’s hungry masses to spend their money on the latest restaurant franchise craze.
That’s why so many hot new food trends translate into millions, even billions, of dollars for companies like the one I am talking about—companies sharp enough to identify and capitalize on them.
Consider some of the other recent franchise booms...
When the fast-food craze first swept North America, the money investors made was simply unbelievable. Millions of consumers flocked to these trendy new restaurants to gobble up hamburgers... fries... pizza... whatever was selling.
And that was only the beginning. In each decade since, we’ve witnessed not one, but many franchise booms sweep through the U.S. and Canada:
- 1970s: Burgers. This was when McDonald's really took off all across the U.S. Investors who had the foresight to buy McDonalds in the early 1970s would be fabulously wealthy today. How wealthy? Well, every $10,000 invested in McDonalds in 1970 would be worth more than $3.5 million today.
- 1980s: Pizza and Chicken. In the 1970s, the fast-food industry saw a diversification away from just burger joints into other types of food – such as Kentucky Fried Chicken and different pizza chains. Yum! Brands (NYSE: YUM), eventually bought out a number of brands—KFC, Pizza Hut, Taco Bell, Long John Silvers (LJS), A&W, Pasta Bravo, Wing Street, and East Dawning—and now has 40,000 restaurants in 125 countries. Early bird investors could have purchased shares of YUM for just $7 bucks a share in 1998 (adjusted for splits and dividends). Today it’s selling for $73.
- 1990s: Coffee. The 1990s was the decade of Starbucks—the Seattle coffee franchise that has seen exponential growth all across North America and the world. Love it or hate it, Starbucks is a great QSR success story. And of course, you could have picked up shares of Starbucks for only 77 cents each, split-and dividend-adjusted, in 1992. Today they’d be worth almost 100 times that amount, or $73 a share. Every $10,000 invested in Starbucks in 1992 would be worth a cool $942,337 today.
- 2000s: Chipotle. In the U.S., at least, the 2000s were dominated by Chipotle Mexican Grill. Founded in 1993 in Denver, the chain now boasts 1,500 restaurants across the U.S. and here in Canada that offer Mexican-style burritos, tacos, burrito bowls, and salads. The company has annual revenues of $3 billion, and its stock has jumped from a low of $39 a share in 2008 to around $550 a share today. That’s a gain of 1,318% in five years, enough to turn every $10,000 into $141,857.
In each decade, North America consumers have latched onto a fast-food craze and made early investors rich as Midas.
And each time, investors who spotted these trends and took decisive action made a killing.
Of course, these trends
aren’t limited to “junk food”
Now, a new trend is gripping the QSR industry: The development of quality ethnic restaurants selling delicious Chinese, Japanese, Italian, Jamaican, Indian, and other types of cuisine.
Each of these new chains are growing into colossal, multi-million dollar micro industries, with early adopters invariably grabbing the biggest gains.
That’s why I believe QSR is “the” trend to watch in the restaurant industry... especially here in Canada.
And the company I’m talking about is perfectly positioned to make the most of it. That’s why I’m convinced this company will only continue to grow its presence in the QSR scene.
If I’m right, its stock price is going to explode upwards … rewarding investors with outsized returns in the coming years.
In a moment, I’ll dive into details on why I’m so excited about this Canadian investment. But first, let’s take a look at the overall trend.
QSR is a $21.7 billion industry in Canada!
Here in Canada, you can find QSR franchises in Toronto… Montreal... Vancouver… Calgary… Ottawa… Edmonton… Winnipeg… Halifax… Saskatoon… practically every major city in the country.
Every day, hordes of hungry customers are eager to spend money on hearty, tasty, delicious food served in beautiful surroundings and with a smile.
And Quick Service dining is not just a Canadian phenomenon, either.
It’s happening all across the U.S. and in Europe and Asia as well. The global fast food market is forecast to have a value of $332 billion in 2016, an increase of 31.2% since 2011.
- In the United States, QSR establishments number more than 149,000, employing more than 3 million people, with annual revenues of more than $191 billion …
- In Australia, QSR is now a multi-billion-dollar industry, with sales exploding from $4 billion to $37 billion in just three years ...
- In South America, QSR operations are expanding rapidly in urban centers, especially in Mexico, Brazil, and Chile. Market research firm Euromonitor International expects that just at McDonald's, 2014 sales will outpace 2010 sales by 19% in Argentina, 26% in Chile, 27% in Brazil and 31% in Colombia...
- And in Europe, allegedly home of the “slow” food movement, the QSR market is projected to top total revenues of $44 billion by the end of 2016, representing a five-year compound annual growth rate (CAGR) of 3.3%...
So obviously, QSR is much more than a passing fad—it’s a dominant force in the restaurant industry. International trends like this don’t disappear overnight.
Not every stock will take off. But smart QSR executives—like the ones that run the company that I’m talking about—could have years of sustained growth ahead of them.
If you’re looking to bank serious profits, I think you’d be hard-pressed to do better than this Canadian company.
It’s the perfect stock to cash in on the massive QSR industry …
Your Ticket to Superb Profits
from the QSR Trend!
The company franchises... and, in a few cases, operates, myriad quick-service restaurant brands in nontraditional locations throughout Canada: food courts, shopping malls, gas stations, convenience stores, movie theatres, or amusement parks.
It franchises more than 2,500 niche restaurants (under a total of some 26 “banners”) with annual revenues of $100 million. The company has grown both through developing original concepts—often “ethnic” cuisines such as Chinese, Japanese, Korean, and Indian—and through acquisition of chains/brands over time.
Some of the franchises are names rescued and resuscitated from the scrap heap. Others offer exciting growth prospects on their own merits.
The Company’s Plan
for Rapid Expansion
One of the biggest things this stock has going for it is the company’s business model.
As primarily a franchising play, it’s in what we call “the cheque-cashing business.” Each week/month, the legion of franchised stores (over 2,500 strong) all send their royalty cheques to the company’s headquarters.
In addition, this rapidly growing conglomerate collects franchise fees from new operators, sells goods and services to franchisees, owns a food processing business that sells to distributors/retailers, and runs a small distribution center business predominantly selling to a couple of the franchisees.
Being a cheque-casher has left this company in the enviable position of having a steady and recurring stream of free cash flow with little need for capital reinvestment in the business.
That cash stream has to go somewhere, and that’s largely been into further acquisitions, adding compounded, high-quality growth to its cash stream.
All this could mean
major-league profits for investors
who buy this stock today!
You can see why this company caught our eye.
Best of all, it’s still a relative unknown. Only three analysts cover the name, which indicates that many Bay Street big shots have probably never even heard of it!
You don’t need me to tell you the biggest profits often are born out of under-followed stocks.
But what you may not realize is that under-followed stocks don’t stay that way for long. And with mainstream investors starting to discover the cash-rich world of Quick Service Restaurants… It may be just a matter of time before this dynamic Canadian company pops up on their screen.
Investors who get in now could easily bank solid gains as more investors learn about this opportunity and drive the price up in the years ahead.
Enough to multiply your money many times over if you get in now!
Get the full story and
dozens more quality Canadian
stock recommendations when
you try Stock Advisor Canada today!
Canadian investors are always on the lookout for great investments like the one I’ve described in this message.
And that’s why I urge you to check out Stock Advisor Canada today—The Motley Fool Canada’s inaugural advisory service.
When you accept a risk-free trial membership, you’ll gain immediate access to our detailed investment dossier on the amazing QSR opportunity we’ve been discussing—the Canadian stock that has soared 4,800% over the past decade.
And that is merely one of the many blockbuster Canadian stocks we highlight regularly in every issue of Stock Advisor Canada.
Month in and month out, we bring you our very best Canadian stock idea, as well as a hand-picked idea from one of our American advisory services that we think is perfectly suited for Canadian investors.
That’s two monthly recommendations we think will set you on the path to thrashing the returns achieved by the market.
Get our complete, no-holds-barred analysis
and much, MUCH more!
Stock Advisor Canada is the place where you’ll find complete, no-holds-barred analysis on our favourite companies, month-in and month-out.
There are piles of members-only content and resources associated with this service, including...
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This could be the opportunity
of a lifetime. But only if you’re
willing to take action...
So, we’ve done our part. We’ve uncovered a company that’s perfectly positioned to take full advantage of the restaurant industry’s hottest new trend — a trend that has already created a Canadian $21.7 billion industry.
Now the rest is up to you.
Will you be among the investors with the foresight and patience to get in ahead of the crowd … potentially doubling … tripling … and maybe even quadrupling your money in the years ahead?
Or will you choose to sit on the sidelines...and possibly kick yourself later?
ACT NOW to join us and get full details
on this and other exceptional
opportunities for Canadian investors!
Every Canadian investor who’s been around for a while knows that your best time to invest is before the crowd. And so far, the QSR winner that’s gained 4,800% over the past decade is still flying under the radar of analysts. But that won’t last much longer.
When Starbucks went public in the 1990s, it was flat for a while. Early bird investors had time to acquire all the shares they wanted at bargain prices.
And then Starbucks started climbing... from a split-and dividend-adjusted 77 cents a share to $77. Imagine turning $10,000 into $1 million.
While I can’t promise the stock I’ve described in this message will do that well, I do believe it will hand you handsome profits over the next few years.
The media—financial and otherwise—are just beginning to notice. But so far, most investors remain unaware of the QSR industry’s tremendous profit potential here.
However, it’s just a matter of time before this lucrative trend becomes the hot topic among Canadian investors.
That’s why I strongly urge you to accept a risk-free trial of Stock Advisor Canada today!
Don’t wait. |
