Horton's - the largest fast food chain in Canada; 27.7% of the market,
based on traffic, is coming public this week!
I can tell you two things about this IPO: first, it's
going to make some people a lot of money. And second, I think
guys can have a piece of that!
I think the 'THI' IPO will be hot, hot, hot
So, I'm going to tell you why I think that this is for you - buy, buy,
buy! And then I'm going to tell you exactly what you have to
to try to make money off the IPO.
Now, how can I tell before hand that when this stock starts trading, it
should go up, and up, and up.
How do I know to get you on board? It's all about the
roadshow. You can always judge an ipo by just counting the
of people who go to the roadshow.
Well guess what? This head count for Tim Horton's?
the charts! It's going to be incredible; people are queueing
for this horse race!
Right now, the price range for this one: $18-20 a
I think the underwriters for this one - Goldman Sachs and RBC - are
going to have to raise that range. And when you get bump
bump after bump in the price range, that's a fabulous sign that you've
got to be in!
Now, let's get some things straight. Thi will not be a cheap
stock if it trades at $18-20 a share, and it certainly won't be cheap
if it goes to $28, which is where you'd expect it to go, given the
success of Chipotle - the current benchmark for fast food spinoffs.
But, really, a stock is only cheap or expensive, relative to where it's
going, and I think this one is going higher!
We know there's strong demand from the roadshow. I also think
this stock will be huge, not just in the united states, but in Canada.
I think the Canadians will pour money into this stock.
Demand is high, supply will be tight. There's just going to
very small float, and that means we're talking about real scaricity;
the float being the actual number of shares - not the ones that are
going to be kept back -but the actual number of shares that will trade.
Low supply. High demand. Even if you didn't ever
economics 101 class, you can tell that translates into higher prices
that you've got to be in.
Now look, here's what I think you need to do. I don't want
you into this for a long term investment.
Sure, they'll probably try to expand into America, but their growth is
already very constrained in their core market, because they seem to be
pretty much everywhere in Canada; they've saturated that market.
They may have maybe 3/4 of the market for coffee and doughnuts up
there. Even with strong same-store sales numbers, which
admittedly they have, this is not a growth story and you know, on wall
st., we are junkies for growth. Most of their stores are
by franchisees, and that model should make you a little
squeamish. Remember boston chicken? Holy
So, understand. I think you want in this thing as a trade off
high demand at the IPO, and the very tight float. I do not
you to buy this, and hold the stock for 18 months, or 5 years, or
whatever. And then, down the line, blame me for getting into
So, here's what you do: I think based on the Chipotle (CMG)
metric, the stock could go as high as $28; I don't
pay above that. I think you should enter a $24 top order to
Goldman Sachs, or to RBC, or anyone else who has stock to offer.
Why not get the free money? I always like free
Once you get a reasonable, just sell it. Don't stick your
neck out when you do not have to.
The bottom line: you go to Goldman; you go to RBC;
you go to
whoever can deliver you some this, and I think you pay up to $24 for
it. After that, you let it go, and please, don't be afraid to
a trader, and take some profits when you've got them.
While it looks like CMG, it's not as good - it doesn't have the growth,
it doesn't have the room. You got this from me.
Tyler Technologies (TYL)
Let me tell you why I hate local governments, and how that could make
you some mad money!
Local governments are the last bastions of totally anti-deluvian
Things that could be easily done with computers are handled by
inefficient teams of people at the local government level.
Local gov'ts never want to invest in the capital that can make running
a town cheaper and easier. Hey, that's a big problem.
But everything I hate about local gov'ts is about to change, because of
the next stock I'm telling you to buy. It's a new one.
It's called Tyler Technologies (TYL).
These guys make the software that automate local govt's.
Right now, TYL provides information management software/services for
As of 2002, there were 87,525 governments from the county down in
America. So, these guys haven't even begun to
market for automated local govt's.
I predict big numbers for TYL this year.
Not only that, but they use their cash flow to buy back
stock. Buy, buy, buy! Very investor friendly.
There's nothing better than buying stock in a co. That does best for
its shareholders. A co. that's aligned with you - that has
Speaking of shareholders, the co. Has the added advantage of
having Michael Dell (CEO, dell computer) as its largest shareholder.
I also can see TYL as a little niche schnitzel if not a buy outright,
for a co. Like oracle. But you don't need that kind of
speculation in TYL to make this a worthy investment.
The bottom line!: you want to capitalize on the complete and
utter inefficiency of having some 80,000 different
municipalities? Then I think you need to buy TYL!