Category Archives: Investments

McDonald’s Is Yummier Than Yum Brands!

Companies, Consumerism, Investments, , , ,

Yum Brands, Inc runs fast food restaurants such as Kentucky Fried chicken, Taco Bell, Pizza Hut and A&W All-American Food Restaurants Brand. They have about 37,000 restaurants are in 110 countries. The company is growing especially in China and developing countries.

Analysts were concerned that with the greater unemployment and economic constraints would cause people to abandon the fast food chains. This is to some extent true; however it is so much a part of modern life to travel and to grab meals along the way that it continues even during hard times.

Over the last year the stock has gone up from $46 to $54 per share. The stock has a 50 day moving average of $52.12. It’s dividend yield is 2.2 percent or about $1.20. The return on equity ratio is 79.19%. It has a high debt to equity ratio of 174.19. Revenue growth in the last quarter was 9.4%.

Its chief competitor is McDonald’s Corp whose stock has been steadily rising for the last five years. It has risen from $40 to $90 and is still going strong. It’s a real powerhouse and from an investment perspective its is better than Yum.

Tsakos Is Ready To Ship Out

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Tsakos Energy Navigation Limited is a favorite company of world renowned investor George Soros. The company has a negative p/e ratio. George Soros group bought 11,000 shares of the stock in the second quarter and since then it has gone down from about $10 to $5.92. I see that over the last three years, the company has had lower profits each year. I it still making money for sure and is not terribly in debt.

I think that the Soros Group did not expect it to go down or they would have waited to buy it.  Its true that it is near the bottom because there is only 5 more points to go down until bankruptcy. Why is George Soros holding onto this stock? Perhaps he expects it to go up as the economy turns around. The company is basically sound.

D. John Stavropoulos and Francis T. Nusspickel are among the officers who make the company go.

Pennant Park Is On The Money

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PennantPark Investment (PNNT) is a business development company which George Soros has on his top twenty list. PNNT loans to medium sized companies and provides mezzanine lending, leveraged finance, and distressed debt services. The company is well managed and has had a very low level of non-performing loans. Since PNNT founding in 2007, the company has raised almost $800 million in debt and equity capital. It has invested over $1 billion in 101 businesses and 54 financial sponsors.

Soros Fund Management LLC purchased 11,800 shares of PennantPark in the second quarter of 2011. Pennant Park has consistently paid dividends since its founding in 2007. Since then the dividend has increased by 92.8%. PNNT’s second-quarter balance sheet showed $28.8 million in cash. Pennant Park should be able to continue paying dividends.

Permanent Park also maintains independent directors. One of them is Marshall Brozost, who is a lawyer with experience in finance, mergers and acquisitions, restructurings and private equity. In capacity as a director he helps the company with overlapping legal and financial issues. Interestingly, Guy F. Talarico, the Chief Compliance Officer, who works in finance, is also certified to practice law.

Americans Turning to Fast Foods

Investments, , , , , , ,

As Americans look to save money, more and more people are going out to eat at fast food restaurants. Three companies are good examples of fast food companies whose stocks have increased as of late.

McDonald’s

McDonald’s (MCD) has been on a tear over the last year, rising from 72.14 to 90.45.  It has had steady growth overall and sees no sign of stopping.  The company, led by Jim Skinner, saw excellent second-quarter earnings. McDonald’s reported a 15% increase in profits. Much of its profits has been through beverages at the McCafe.

Yum!

Although it’s stock stands at 51.51, YUM! Brands (YUM) range this year has been from 41.35 to 57.75, a significant increase and a sign of continued growth.  Whether it’s KFC in eastern Africa or other Yum! brands in China and Japan, Yum! Brands is in it for the long haul, both in the USA and abroad. EVA Momentum created by Bennett Stewart of EVA Dimensions give YUM! an EVA growth rate of 1% placing it in the top 50 percentile of the Russel 3000. This makes YUM! a great long term buy.

Krispy Kreme Doughnuts

Krispy Kreme Doughnuts (KKD) may not be your choice of eateries, but it’s share is expected to post a report second-quarter profit of 6 cents a share by the time markets closed Thursday.  This is double last year’s earnings of 3 cents a share. Shares are currently holding at 7.79.

Should One Invest In Bank of America?

Economy, Investments, , ,

Yes and no. The banking industry was hit very hard in 2008 and has been improving itself since then. The sub-prime crisis left banks with so many mortgages and unpaid debts that many banks went under. Many surviving banks were saddled with unpaid mortgages which are still weighing them down.

This is what happened to Bank Of America Corp in 2008. The Bank of America’s was also criticized for purchasing Merrill Lynch which also put it further into debt. Since then the banking industry in general and Bank of America in specific has made changes to improve financial responsibility and profitability. The purchase of Merrill Lynch caused such criticism that the then CEO, Kenneth D. Lewis was forced to step down and Brian T. Moynihan replaced him as CEO. Ironically, when the first quarter results of 2010 came in, Brian Moynihan gave much of the credit to profits to the Merrill Lynch division. Since becoming CEO, Moynihan has sold over 20 non-core business segments in order to focus on the core profit-making activities.

Aside from the real estate sector, the bank made a 3.7 billion dollar profit for the second quarter. This was wiped out by a real estate court settlement, but shows that the company will be fundamentally strong when it clears up its problems from the sub-prime disaster, including a major suit by AIG. Should one invest in Bank of America? Yes, but not now. Give it time to heal from its sub-prime problems and then buy. My estimate is to buy in 2014.