Australian (ASX) Stock Market Forum

GYG - Guzman y Gomez

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Sean K said:
I like nachos and margaritas, but this looks like it's going to be a disaster.

Not sure what the ASX code is going to be. Maybe GAG.

The relative scarcity of its shares available to outside investors will certainly help to keep a floor under the price, but at $22, it’s a high-priced stock.

Indeed, at these levels it makes Guzman one of the most expensive quick service restaurants in the world, with shares priced well ahead of local rivals Domino’s Pizza as well as KFC and Pizza Hut franchise owner Collins Food.
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I agree but it's opened at $30.

Seems insiders and instos are gonna do well in the short term.
 
Sean K said:
I think funds and ETFs would have to buy it as it's going into the ASX 200, 100, etc. So, maybe into compulsory buying, if there's such a thing.
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i think the word is mandatory , but if inside the ASX 100 , you are absolutely correct , if only in the XJO ( top 200 ) very likely correct also ( most index funds would probably only need 1%-2% if only an XJO participant )
 
Sean K said:
I think funds and ETFs would have to buy it as it's going into the ASX 200, 100, etc. So, maybe into compulsory buying, if there's such a thing.
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There would have to be a time frame. They can wait for it to adjust to "real" Share Price value before for filling their obligations to have them in their portfolio.
 
Sean K said:
I think funds and ETFs would have to buy it as it's going into the ASX 200, 100, etc. So, maybe into compulsory buying, if there's such a thing.
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I prefer GyG over Zambrero's, but my adult kids and their friends are the opposite. they only get GyG when I'm paying ;-)


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Sean K said:
Is that Taco Bell?

@Dona Ferentes PE of 370, is pretty close to what Street Talk came up with.

This is gaining a lot of scrutiny in the media at the moment. 380 PE wouldn't pass the RIH dart club test.

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“It is not only fundamentally wrong, it is inconsistent with normal practice for constructing earnings multiples or how a prospectus for a business like Dominos or Collins Food is valued or analysed,” said one prospective investor said on Monday.

“Anyone who understands valuation multiples knows that when EBITDA is presented excluding the costs of the leased stores – which their selection of EBITDA does because rent manifests primarily as Amortisation of the Right of Use Asset, and Interest on Lease Liabilities – then the enterprise value needs to include the debt associated with the leases,” another investor told this column.

So, that’s $210 million as at December 31, “and would, of course, be higher at June 30,” the investor said. “And much higher in 2025, which is, of course, the earnings they want the valuation based off.”

Fist bumps at TDM​

Actually, the treatment of the lease liability is in the prospectus. In the fine print. Is that disclosure enough to prevent the corporate regulator requesting a supplementary disclosure to give prospective investors a truer picture, fundies are asking.

It may also offer an insight into why New York-headquartered buyout giant Blackstone could not come to a deal to buy up Guzman y Gomez, as revealed by Street Talk.

Of course, value is in the eye of the beholder. But consider how expensive Guzman y Gomez would appear if it was more traditional when it came to metrics. That would be about 100-times EBIT. Or 380-times PE.

The float will see TDM go down from 33 per cent to 29.7 per cent of the register, while Guzman y Gomez’s founder, Steven Marks will fall from 11.2 per cent to 9.9 per cent. Barrenjoey will slide from 10.5 per cent to 9.6 per cent. The sell down will account for $42.5 million of the float’s $242.5 million proceeds.
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I have purposely ignored GYG which is a sure sign it will go gangbusters and provide early investors with returns outpacing NVidia. Nonetheless I did see, as you @Sean K and @Dona Ferentes did some of the kerfuffle about the cost of leased property being hidden while eating some fish and chips from the AFR at my local f n c shop "The Mediterranean" here in Townsville along Bayswater Rd.

Where is this up to presently as The Fundamentals table at the Ross Island Hotel only deals in PE's between 7 and 70. It all sounds very fishy to me. Good luck to those rushing away with real money from the trading today.

gg
 
Garpal Gumnut said:
I have purposely ignored GYG which is a sure sign it will go gangbusters and provide early investors with returns outpacing NVidia. Nonetheless I did see, as you @Sean K and @Dona Ferentes did some of the kerfuffle about the cost of leased property being hidden while eating some fish and chips from the AFR at my local f n c shop "The Mediterranean" here in Townsville along Bayswater Rd.

Where is this up to presently as The Fundamentals table at the Ross Island Hotel only deals in PE's between 7 and 70. It all sounds very fishy to me. Good luck to those rushing away with real money from the trading today.

gg
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there's a bit in the press about how a tie in with VEA Viva Energy may be the direction of future expansion, and/ but how existing agreements give VEA the advantage with a very modest fee structure.

ADDED ..
....p209 mentions Mehico Ltd, a Viva company holding master franchisee in several states
where most franchisees pay a tiered royalty fee of between 8 per cent and 15 per cent of net weekly sales, the South Australian master franchisee agreement has a fixed royalty rate of 4 per cent to 5 per cent.
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too true ... as stated
Approximately 55 million shares (or 54% of shares outstanding) will be subject to voluntary escrow, which leaves a relatively small pool of shares to trade among keen investors.
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When you combine .. these factors – no general public offer, a heavily oversubscribed IPO, the largest listing in almost a year and a tightly held register – you create a rather demand-inducing environment that'll drive the share price higher.
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... but for how long?
 
Makes no sense, @Dona Ferentes, 50 million shares is still plenty of liquidity. Who ever wrote that sounds like they are part of the pump squad! Why do they think investors will be 'keen' for this pile of crap?

The second paragraph you have quoted also sounds like a pump exercise, it could be easily argued that the no general public offer was because it would have been a huge flop given the poor financials, a large IPO doesnt have any corelation to share price, and these factors are likely to combine to drive the price lower post the float.

Are you quoting the underwriting brokers? Cause thats what it sounds like.

The volume was small today, I think they are going to have trouble holding the price up on this, will be interesting to see how hard it continues to get pumped to retail investors and whether they continue to buy the dubious narrative.
 

Send a burrito to the GYG naysayers​


www.livewiremarkets.com

Send a burrito to the GYG naysayers

I recently wrote about the then-upcoming Guzman y Gomez (ASX:GYG) float. That post and its associated social media mentions engendered some polarized views. Curiously, perhaps the bullish camp was filled with those who eat and enjoy Guzman y Gomez’s products. Those who thought the burritos...
www.livewiremarkets.com www.livewiremarkets.com



please note the only 'restaurant stock i found that was mildly interesting was RBD , but couldn't find an attractive entry point so bought into Tegel instead ( which was later taken over )


i think this ( and it's rivals ) will struggle in a struggling economy
 
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Third, management is planning for an acceleration in store openings. The company plans to add 30 stores per year in the next few years, increasing that to 40 store openings per year within five years. There are already 95 sites in Guzman y Gomez’s pipeline, and this is a significant uplift on the 185 stores already operating in Australia.

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that passage alone would have terrified me , had i researched it looking for an opportunity

good luck if you chose to play here
 
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