Well… A picture is worth a thousand words.
I don’t know what to say about this.
They released news about acquiring Counter Custom Burgers and Built Custom Burgers on November 14 at 9:59 after the market opened.
MTY Food Group Inc. enters into an agreement to acquire The Counter Custom Burgers and Built Custom Burgers
Look at the volume bars below of the chart. Nothing really happened after the news on Nov 14 except around 2 pm with a sizable purchase.
Then Nov 15 comes along and little more purchases pushing the price of the share up little further.
Then today it just exploded. Look at the volume. Avg volume is about 17,000 but today the volume was about 46,000 pushing up the price of the share by 6.44%.
Last 3 days, it went up by 9.49%.
The news was not a super exciting one- well… not the one we had 2 years ago (Remember Kahala acquisition?) and the earnings that they released on Oct 10 wasn’t good (but I loved it because it pushed down the price of shares so I bought more at cheap while the cash flow for the quarter was pretty awesome…).
MTY is one of my biggest holdings now. So I am not really complaining but what made it really go up today?
- Is it the excitement from the acquisition? The burger places seem really trendy and hippy. I know that the millennials are all crazy about hippy, customizable, healthy looking, trendy, green food. restaurant loving, monthly fee paying, YOLO… so that may have done it??? (Maybe a little…)
- Is it more about invasion of our food court king of Canada to uncharted US food court territory?
- or it could be an asset manager building his position as MTY fit into their size requirement?
Well let’s be happy about what happened today after the crash of Linamar 🙂 I have not sold any since the crash and still have 3/4 of position which I am aiming to reduce it to 1/2 eventually (cyclical isn’t my thing…) I just don’t know when that will happen.
Trust me… I am not trying to pump the stock… actually quite the opposite… I want it to stay as low as possible so that I could buy more but I guess I am too late…
Who knows, MTY may spit out tomorrow what just swallowed today. I don’t really care because I am not looking to sell MTY as long as the king kicks asses.
Here is a little bonus for you- I think the video was made 2014. I could not find recent videos and that’s +1 for me. You probably know about me and my investing style now… I love companies staying under the radar… you know companies that no one give a xxxx about… MTY is just that and that’s just so lovely!
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I am also a shareholder of MTY. I bought my shares at around 38-39$ a couple months ago so I am quite happy with the recent increase. However, I find that MTY has been relying more on debt in the past year for their growth. I don’t find that it is too bad right now, but I will keep an eye on that for the next quarters. I remember reading one of your past posts about the Dupont formula a few months ago (which really helped by the way!) and if you break down the Return on Equity for MTY, you can find out that MTY uses a leverage above 2.5 for the past year which kind of worries me a little…
Yeah buying Kahala brand required MTY to borrow but you can see that every quarter they have been paying back while still acquiring other brands.
Glad Dupont has been helpful to you. That’s one of my favorite and simple ratio to keep me in check. Just double check the numbers with actual financial statement filings from SEDAR as the numbers from financial websites such as google finance and morningstar are often wrong. 🙂
I bought some MTY few months ago and very happy with it. Thanks to you!
That’s great to hear. I am glad I was helpful. Make sure to monitor the company though.