Robusta fundamental, leveraged investments

[Ves]

The discussion on Collins Foods has given me a lot to think about. This stock has by far the most debt in the portfolio, perhaps I have underestimated the worst case scenario or overestimated the stability of earnings and cash flow from this business.

The basic question for me now comes down to risk / reward. Hopefully holding until the next reporting season is the correct course of action I am still wrestling with that decision.

You will learn and notice a lot by holding small positions in companies. I seem to be more thorough in my analysis when I have a small position open, and this allows me to decide whether to build my holding further.

 

[robusta]

You will learn and notice a lot by holding small positions in companies. I seem to be more thorough in my analysis when I have a small position open, and this allows me to decide whether to build my holding further.

You are right there, I will think twice before averaging down in this one, however I find it difficult to believe KFC will not make decent money in Queensland.

 

[skc]

You are right there, I will think twice before averaging down in this one, however I find it difficult to believe KFC will not make decent money in Queensland.

krispy kream went bankrupt in Australia - one of the most overweight countries in the world... so anything can happen.

 

[tech/a]

Ive seen 3 Red Rooster Outlets close in Adelaide in the last few weeks!

 

[kermit345]

While KFC is obviously a favourite for a lot of people, whenever I go there I don't really see any healthy options or anything health related which could be to their detriment. You look at HJ's and McD's now they show the kj's in all of their offerings and are actively trying to make all of their burgers etc healthier or lower in energy. Not sure if this is weighing on KFC at the moment but in my view the wider population is becoming more health concious and KFC will get left behind if they don't start to join in.

 

[McLovin]

While KFC is obviously a favourite for a lot of people, whenever I go there I don't really see any healthy options or anything health related which could be to their detriment. You look at HJ's and McD's now they show the kj's in all of their offerings and are actively trying to make all of their burgers etc healthier or lower in energy. Not sure if this is weighing on KFC at the moment but in my view the wider population is becoming more health concious and KFC will get left behind if they don't start to join in.

KFC has been in decline in the US for years. There is a stigma attached to fried chicken over there that we don't have in Australia though, ie you're poor and (probably) black.

I think a change of taste is more likely to kill off a brand rather than suddenly becoming health conscious.

 

[skc]

KFC has been in decline in the US for years. There is a stigma attached to fried chicken over there that we don't have in Australia though, ie you're poor and (probably) black.

I think a change of taste is more likely to kill off a brand rather than suddenly becoming health conscious.

I much prefer Nandos, or just the old chook from Woolies.

 

[McLovin]

I much prefer Nandos, or just the old chook from Woolies.

Nandos is good. I used to be a big Oportos fan but since they started franchising it's really gone downhill. Ole or Ogalo are my Portuguese chicken burgers of choice now.

 

[kermit345]

Nando's is excellent, however as I live in the country I never get to go there much. I think your right McLovin to some extent that people won't suddenly become health concious but I think your looking at it in the view of Take Away vs Non Take Away. I know personally ever since Hungry Jacks stated putting the kj's next to their menu items its made me think twice about going large, getting water instead of coke, getting a grilled chicken burger instead of a fried chicken burger.

KFC will always have its customers, i'm just thinking maybe HJ's and McD's are giving themselves a better opportunity to capture some extra market share with their offerings compared to the Colonel.

 

[CanOz]

Bloody heck, you guys are making me hungry!:kebab

CanOz

 

[notting]

Bloody heck, you guys are making me hungry!:kebab

Don't worry. Sure the misses is stormen up some chicken feet or deepfried scorpians for ya OZ! :homer:

 

[skc]

I promise this is the last post I will make on this htread about chicken.

 

[McLovin]

Nando's is excellent, however as I live in the country I never get to go there much. I think your right McLovin to some extent that people won't suddenly become health concious but I think your looking at it in the view of Take Away vs Non Take Away. I know personally ever since Hungry Jacks stated putting the kj's next to their menu items its made me think twice about going large, getting water instead of coke, getting a grilled chicken burger instead of a fried chicken burger.

That's a fair point. But I'd hazard a guess your average punter filling up on a bucket of fried chicken probably knows it's not doing him/her any favours. Remember about 7-8 years ago during the whole "Supersize Me" thing, the CEO of Wendy's was getting questioned about whether or not the company would expand into offering healthy options and he said words to the effect of "people don't come into our stores for healthy food". From what I've read, McD's etc don't make much money at all off their healthy menu items.

skc, I like your style. "Dale dug a hole", best line ever!

 

[McLovin]

I read this on Bloomberg and thought it might be of interest. It's about KFC expanding in Africa.

It's very interesting that in the markets Yum! is expaning into they have clearly aimed their product at being more than just fast-food. $22 at KFC seems like a lot!

Teddy Muthusi goes to Kentucky Fried Chicken in Kenya’s capital, Nairobi, for more than just fried food: it’s a status symbol.

Muthusi gladly spends 1,870 shillings ($22), a quarter of the national monthly minimum wage, to treat his girlfriend at the country’s first U.S.-based fast-food company’s outlet that opened in August. He can afford what many can’t. About 45 percent of Kenya’s population live on less than $1.25 a day, according to the World Bank.

“I’m willing to fork out more because it’s cool, it’s trendy, it’s a great place to be seen, and the food is good,” Muthusi, a 36-year-old creative manager at Easy FM radio station said in an interview on April 20, raising his voice above the pop music blaring through speakers. “Kenyans have that feeling if you can eat at KFC, you’ve made it.”

Muthusi is one of the upwardly-mobile, young and growing middle class of consumers in Africa that retailers including YUM! Brands Inc. (YUM)’s KFC are targeting to compensate for slower growth in developed markets. Household spending is set to expand 63 percent to $1.4 trillion in Africa by 2020, home to the world’s youngest and fastest-growing population, according to a 2010 report by McKinsey & Co.

Doug McMillon, chief executive officer of the international operations of Wal-Mart Stores Inc. (WMT), the world’s largest retailer, will join other executives seeking a foothold in Africa when the World Economic Forum’s annual Africa meeting begins in Addis Ababa, Ethiopia’s capital, today. LVMH Moet Hennessy Louis Vuitton SA (MC), the world’s largest maker of luxury goods, Coca-Cola Co. (KO), the world’s biggest soft-drinks producer, and PepsiCo Inc. (PEP) will also be represented at the three-day conference.

http://www.bloomberg.com/news/2012-05-08/kfc-bet-on-africa-middle-class-draws-global-retailers.html

 

[So_Cynical]

I read this on Bloomberg and thought it might be of interest. It's about KFC expanding in Africa.

Africans love fried chicken....seriously love it, its seen as a status symbol of sorts....the white variety of (meat) chicken is seen as a proxy for all things white (developed and good) and treasured for that, as wrong as that seems to us.

There is no political correctness in Africa.

 

[sinner]

If anyone was curious for a source for So_Cynicals claim as I was, I seriously advise they don't type "africans love white meat" into google...

 

[CanOz]

If anyone was curious for a source for So_Cynicals claim as I was, I seriously advise they don't type "africans love white meat" into google...

LOL! I bet you had a fun time in there anyway!:afro:

 

[McLovin]

Africans love fried chicken....seriously love it, its seen as a status symbol of sorts....the white variety of (meat) chicken is seen as a proxy for all things white (developed and good) and treasured for that, as wrong as that seems to us.

There is no political correctness in Africa.

Yeah. I was going down to Africa for work for a while. Dealing with a Nigerian bank, a frustrating experience. Anyway, I was amazed at how every woman would literally throw herself at you because you were white. It's full on, not subtle. I'm talking staff at restaurants will grab you by the crotch to let you know they're keen.

 

[robusta]

New Investment Well actually this will be third time around for this one.

MCE - Matrix Composites & Engineering

790 x MCE @ $2.53 = $1998.70

Managed to hit the 52 week low on this one, will be interesting to see if more are to come.

I fell the bad news is priced into this stock, surely they have to get some orders. Hopefully sooner rather than later.

 

[notting]

Re MCE - I'm not sure what the percentage is however new 52 week lows favour further lows!
It's one of those trend things.
Odds are Shirly down.
A weekening AU$ will help the cause down the track.
This thing could be significantly lower, buy then! Sorry.