# Tim Hortons (THI)



## Kaitlyn

I haven't followed it as closely, but looks like it's been beaten up recently, basically at a 52wk low. Any thoughts on this one?

I still see new timmy's opening and lines jam packed before work and lunch!


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## Nemo2

I rarely go into a Tim Hortons, and I _really_ can't see the attraction, (although I did meet Lori Horton at a party many years ago, LOL).......it seems to me, though, that over the years they've done a superb marketing job, to the point where many Canadians seem to feel it's somehow 'patriotic' to frequent their outlets........but what happens when/if this fades?

As an investment, (other than a built-in aversion/skepticism about buying into the food industry), I have no idea.


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## Ethan

Tim's is a cash cow. For the last 4 years they've averaged $296 million in free cash flows, have doubled their dividend and bought back nearly $1 billion in shares. 9% average annual revenue growth during that period. I wouldn't expect the stock to make any dramatic price movements, but they are a very solid long term investment.


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## Argonaut

They have saturated the Canadian market. They cannot grow outside of Canada. It's not a bad stock, but it's not a good stock. Decidedly average. Why buy an average stock when there is high quality out there?

As an aside, the best Tim Horton's employee I ever met was in Revelstoke, BC. Just a super warm and bubbly young girl. Maybe Tim's can push growth and success if they send her up the ladder.


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## doctrine

I like Tim Hortons and get the same feeling in my peer and family groups. I'm keeping an eye on the stock - valuation is everything, but if I could get it below a P/E of 20 and especially a P/E of 15, I would be investing significant money. They have saturated Canada but are very profitable, and are growing significantly in the US now.


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## Sherlock

There a small Tim's in the office complex I work in. There's ALWAYS a long line. We have free coffee at work yet most people still pay for TH coffee.


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## bayview

Long Q at peak times no longer underscore the success of the stock. Stock price discount the future prospects.

Despite the positives highlighted by Ethan, something is amiss if the stock is at 52 week lows.

A quick check reveals slower growth ahead and margins squeeze. Analysts have downgraded the stock since the co alluded to slower prospects ahead in its 3Q results recently. Even MCD is not spared from the economic slowdown. 

I suspect valuation not compelling enough at these levels.


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## doctrine

Agree with bayview - the P/E has been > 20 for almost two years. Their profits are great but earnings are certainly not going to grow more than 5-10% a year. A P/E of 15 would be great at that level but 25 is just too overpriced. My assessment is that it's at a 52 week low because the stock got ahead of itself, and as stocks usually do, it is returning to a more meaningful level. It would really be a compelling stock at $30, although I would probably initiate a position under $40.


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## GoldStone

Sherlock said:


> There a small Tim's in the office complex I work in. There's ALWAYS a long line. We have free coffee at work yet most people still pay for TH coffee.


Do we work in the same office?  Ours is exactly the same.


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## Sherlock

GoldStone said:


> Do we work in the same office?  Ours is exactly the same.


Nope, I'm in the GTA. That just shows how prevalent this scenario is.


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## Freedom45

I hold a small amount of THI in my RRSP. Steady dividend, healthy cashflow, modest revenue growth, dividend increases, and share buybacks sold me. I got in around the $40 mark. Not the best stock in my portfolio, but one I'm content hanging on to...


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## kcowan

I bought in at the IPO. Still holding but I think I will lighten up. Too much new competition from McDs and everyone else.


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## riseofamillionaire

A decent conservative holding. Probably a good buy at these levels with expectations very low. If the US expansion goes better than expected this will be a very attractive entry for the LT. I wouldn't expect any extraordinary returns tho - just a solid position that will hold up in any environment.


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## colossk

riseofamillionaire said:


> If the US expansion goes better than expected this will be a very attractive entry for the LT.


Didn't they try and enter the US market years ago and fail miserably? What's different this time around?


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## brad

colossk said:


> Didn't they try and enter the US market years ago and fail miserably? What's diferent this time around?


No more Krispy Creme. Now it's just Tim's vs. Dunkin' Donuts.


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## bgc_fan

colossk said:


> Didn't they try and enter the US market years ago and fail miserably? What's different this time around?


Another difference is location. From what I understand, a number of shops are setting up near US bases. Some of the soldiers who went to Timmys in Afghanistan found it to be good and probably brought their addiction back with them.


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## doctrine

They have 3300 stores in Canada and about 750 in the US now - they're opening at the rate of about 100 a year in the US. They're still growing in Canada, and probably within a few years they will be opening more new stores there than in Canada.


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## MrMatt

brad said:


> No more Krispy Creme. Now it's just Tim's vs. Dunkin' Donuts.


vs McDonalds

McDonalds has better coffee with a better lid at a competitive price. 

I'm not sure how the food offerings at Tims will hold up in the US, the restaurant market is quite different.


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## bayview

Starbucks is diversifying into TEA


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## riseofamillionaire

colossk said:


> Didn't they try and enter the US market years ago and fail miserably? What's different this time around?


Same store sales growth has been pretty good in the US last 2 qs. Opening about 100 stores a year in the US i believe.


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## RedRose

I wonder if they opened Tim's in Florida and Arizona where Canadian's Winter would be a good strategy.
Just my two cents. I don't have any of their stock in my portfolio.


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## doctrine

They've been primarily opening in the US Northeast (New England area), which has allowed them to concentrate on regional awareness. It seems like the right strategy to me.


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## thompsg4416

Really close to opening a smaller position of around 50-100 shares. I'm looking for something safe that is going to get a return no matter what to even out my portfolio. P/E is currently around 18.8 which puts it at a not to bad evaluation. Not quite ready to pull the trigger but i"m close..


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## leeder

Just wondering, has anyone, in particular TDW users, received the dividend that was supposed to be paid out on December 12, 2012? I don't have a lot of shares with Tim Hortons and the amount of dividends received wouldn't be too much, but I don't have record of it receiving it, which bothers me. If I still don't receive it, should I be contacting TDW?


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## kcowan

I got mine on Dec 12th in TDW Canadian Margin account.


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## mrPPincer

I would give them some more time before phoning in.
I've noticed with TDW that sometimes my rei.un dividends are slow to show up; once when after 2 weeks I saw nothing I did phone in and they looked into it, and I believe the next business day, a monday, the div was there, backdated to the distribution date.
The next month (this month) it was slow to show up again but it was there eventually.

I'm guessing that with my rei.un it is sometimes slow because I have drip set up which in this case is treasury drip and I own just enough shares to sometimes drip a full share and sometimes not, so those two factors could possibly be complicating the process, but my divs have always shown up eventually, backdated to the actual distribution date.


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## Daryl-Manitoba

THI increases dividend 23.8% from 21¢/share to 26¢/share.


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## Addy

Curious what others are doing with THI atm? Holding long term? Selling while it's high? I'm debating if it's time to sell and hope it goes back down so I can rebuy or just hang in there.


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## Cal

If it gives you any indication of when to buy/sell....I am waiting to buy in for under $54.

Take some profits.....


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## doctrine

An activist investor has taken a 4% stake. You never know how high these things go, look at CP. My buy price was always closer to $45 though. But if I owned some now, I wouldn't touch it and will let it run. By the way, I think the activist's ideas are fairly dumb and won't go anywhere.


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## Jungle

I had bought this not to long ago under and surprised to see it run up this fast. I also had plans to add a 5k position in my TFSA.. but now it's run up 16% in 2 months.. need to deploy this cash, might be looking for a cheaper alternative. (not easy in cad market)


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## My Own Advisor

Tempted to buy some at some point. It's a Canadian institution and money maker. Good investment.


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## 1sImage

doctrine said:


> Agree with bayview - the P/E has been > 20 for almost two years. Their profits are great but earnings are certainly not going to grow more than 5-10% a year. A P/E of 15 would be great at that level but 25 is just too overpriced. My assessment is that it's at a 52 week low because the stock got ahead of itself, and as stocks usually do, it is returning to a more meaningful level. It would really be a compelling stock at $30, although I would probably initiate a position under $40.


You Should have bought.... Sitting at 58.05 today.

Holding 310 shares for awhile now!!!!


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## GoldStone

Globe and Mail:

Roll up in Tim Hortons shares a prelude to disappointment: analyst

Quote:

---------------

Shares in Tim Hortons Inc. today are extending their 4 per cent rally on Wednesday after a U.S. hedge fund demanded a shakeup of the iconic coffee chain.

Canaccord Genuity analyst Derek Dley thinks investors are setting themselves up for disappointment.

“We note that many of the suggestions are initiatives that we have heard in the past, and as a result, we believe the shares’ positive reaction appears unwarranted,” he said in a research note.

The recommendations from Boston-based activist investor Highfields Capital includes a demand to boost shareholder returns by taking on new debt to buy back its shares. It also wants Tim Hortons to scale back its U.S. expansion plans, spin off or sell its distribution business, create a real estate investment trust to hold its property assets, and hire new directors with more financial experience. “Importantly, several of the suggestions appear unmanageable to us, and management has through past commentary also dismissed a number of the initiatives,” Mr. Dley said.

He reiterated a “hold” rating and sees the stock easing back after the knee-jerk reaction to the news subsides.

“While there has been a lot of focus on potential value creation activities over the past month, we instead believe investors should remain cognizant of the company’s slowing growth profile in Canada, increasing competition in the breakfast daypart, and relatively immaterial U.S. operations,” said Mr. Dley.

The [hedge] fund currently holds about 6.1 million shares of Tim Hortons, representing about a 4 per cent stake, according to Reuters. Highfields may face other obstacles in pushing through their recommendations. Other large, long-term investors, are happy with the company as it is.

---------------​


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## Addy

We don't have a huge lot of THI but so far (RRSP, RESP, TFSA as listed):

THI 50 $33.281 $58.050 $24.769 $1,664.05 $2,902.50 $1,238.45 74.4%

THI 25 $33.741 $58.050 $24.309 $843.52 $1,451.25 $607.73 72.0%

THI 100 $50.862 $58.050 $7.188 $5,086.22 $5,805.00 $718.78 14.1%

For me it's just figuring out when to sell - I can't see it staying this high for long.


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## Jungle

Why not keep it? Sit back and collect the dividend that's been going up 20%+ per year.


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## Squash500

GoldStone said:


> Globe and Mail:
> 
> Roll up in Tim Hortons shares a prelude to disappointment: analyst
> 
> Quote:
> 
> ---------------
> 
> Shares in Tim Hortons Inc. today are extending their 4 per cent rally on Wednesday after a U.S. hedge fund demanded a shakeup of the iconic coffee chain.
> 
> Canaccord Genuity analyst Derek Dley thinks investors are setting themselves up for disappointment.
> 
> “We note that many of the suggestions are initiatives that we have heard in the past, and as a result, we believe the shares’ positive reaction appears unwarranted,” he said in a research note.
> 
> The recommendations from Boston-based activist investor Highfields Capital includes a demand to boost shareholder returns by taking on new debt to buy back its shares. It also wants Tim Hortons to scale back its U.S. expansion plans, spin off or sell its distribution business, create a real estate investment trust to hold its property assets, and hire new directors with more financial experience. “Importantly, several of the suggestions appear unmanageable to us, and management has through past commentary also dismissed a number of the initiatives,” Mr. Dley said.
> 
> He reiterated a “hold” rating and sees the stock easing back after the knee-jerk reaction to the news subsides.
> 
> “While there has been a lot of focus on potential value creation activities over the past month, we instead believe investors should remain cognizant of the company’s slowing growth profile in Canada, increasing competition in the breakfast daypart, and relatively immaterial U.S. operations,” said Mr. Dley.
> 
> The [hedge] fund currently holds about 6.1 million shares of Tim Hortons, representing about a 4 per cent stake, according to Reuters. Highfields may face other obstacles in pushing through their recommendations. Other large, long-term investors, are happy with the company as it is.
> 
> ---------------​


 IMHO a lot of these analysts are usually wrong anyway--LOL.


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## Freedom45

Jungle said:


> Why not keep it? Sit back and collect the dividend that's been going up 20%+ per year.


This is what I'm doing. I plan to hold long-term, and let the yield keep growing for me each February. I've held it through two or three dividend hikes, and will continue to do so until the fundamentals aren't attractive any more, but I don't see that coming any time soon...


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## Jungle

They are trying to expand in the US, it could be worth holding on to. However Starbux would be a better play if US market is concerned.


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## Addy

Glad to have held on, seeing some very nice numbers. Contemplating Starbucks as well.


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## Kaitlyn

Addy said:


> Glad to have held on, seeing some very nice numbers. Contemplating Starbucks as well.


Indeed! I'm up 40% + dividends. Just wish I bought some more...


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## Jungle

I sold our non-reg THI up 20% to pay off the LOC used to buy it. Wanted to de-lever, getting sick of debt. So I paid off the loan and put the profits in TFSA. But still hold a little in TFSA for long term and won't be buying more at these prices.


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## swoop_ds

This is one of our non-registered holdings. I don't intend to sell anytime soon but wouldn't mind the stock dropping a bit to get in for more share a bit cheaper. Despite what some people say about Tim's, it's rare to go there and not wait in line.


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## Freedom45

Kaitlyn said:


> Indeed! I'm up 40% + dividends. Just wish I bought some more...


In the same boat. Still holding, still smiling, wishing I had bought more way back when.

I'd pick up more if the price dropped, otherwise, I'll keep holding


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## Killer Z

THI is down 11.52% over the past 3 months, and is well below it's 200 day moving average .......I've been doing some research but cannot really determine why the negative shift. Might be a good opportunity to buy if it sneaks under $50/share (would put it's yield over 2%).


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## AltaRed

It is still seriously overpriced with a P/E of 20 or so. It is no longer the growth stock it once was. It needs to get below its 52 week low to be seriously considered.


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## NorthKC

I once considered buying Timmie's but there's no growth anymore. There is now a Timmie's on every corner including in some of the more remote towns that I have worked in. They've tried expanding to the states but it's not working out too well. As a result, how can they grow their business? I can't ever see myself investing in this stock although I might buy 1 share just to say that I own Timmie's, lol.


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## leeder

On the positive side, this company will likely continue its share buybacks and dividend increases. Granted, there's not much of a yield there, but it's growing. Unless they really miss their quarterly/annual earnings, I doubt it would pull back too much. 

On the negative side, it's rather expensive and in a very competitive space. I have concerns about their same store sales going forward, especially if it cannot maintain a competitive edge against the McDonalds and Starbucks of the world.


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## Canadian

I prefer Starbucks on the coffee side of things (both the stock and the beverage). It has an international presence (still growing) that Tim's will never be able to achieve. It collects a nice price premium and I see no reason it can't continue succeeding, provided it doesn't "over grow" itself again.


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## fatcat

tim's has got to move into the usa where they really won't be going against starbucks at all, they will be up against dunkin donuts and krispy kreme neither of which has a health oriented sales pitch

strabucks is all about health with tazo teas and evolution juices and so on, they are much better positioned for the newer generations tastes


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## Killer Z

fatcat said:


> tim's has got to move into the usa where they really won't be going against starbucks at all, they will be up against dunkin donuts and krispy kreme neither of which has a health oriented sales pitch
> 
> strabucks is all about health with tazo teas and evolution juices and so on, they are much better positioned for the newer generations tastes


Fatcat, I agree with both you and Canadian. SBUX appears to be able to evolve with the times while THI feeds off of it's Canadian iconic presence. Unfortunately there are only so many locations that THI can open within Canada. I do not believe THI can penetrate the U.S., nor even try to tap the global market.

However with that being said, the loyalty Canadians have to THI will likely never change, which should allow it to maintain it's market within our borders. If an investor is willing to forego the growth potential, I believe that he/she can benefit from the dividends provided by a few shares should its price drop below $50.


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## SkyFall

My friend works at Starbucks, as a simple barista, one day I was at his workplace and the Quebec's VP was there I started talking with him and he end up telling me that they don't even see Tim Hortons as competitors and he was dead serious even though it's coffee, Starbucks is targeting different people that's what he told me....


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## bayview

To me Tims & SBUX are in totally different tier from each other. Between the two, it is like Toyota vs Kia in terms of taste, ambience and growth potential. No offence intended. 

SBUX is tip toeing into the tea segment probably signalling slower growth potential in the java side over the medium term.


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## Canadian

I agree that I don't see them as direct competitors - I wasn't trying to argue that in my post [in case anyone thought I was]. They are in the same industry though, and I believe Starbucks is a better way to play coffee consumption. They're on two different tiers in terms of image, quality, and price - but Starbucks' upper tier is experiencing more growth and I see more potential growth. Starbucks is trendy and doing a good job developing a "green" image. When the average consumer thinks of Tim's, they think Timbits, weird tasting coffee, and Canada. Starbucks is more popular with younger generations, as well as old. At any time I go to Tim's I see elderly customers and children - and those children will likely start going to Starbucks when they too see it as "cool".

Tim's is still a great company and Canadian icon, but I personally see no reason to play both tiers of coffee consumption.


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## Synergy

I plan to hold both THI and SBUX's. People like their daily Java fix! SBUX appears to have more growth potential but I like the market that THI tends to cater to. THI has also come out with a dark roast coffee - perhaps an attempt to compete with SBUX's? Similar to MCD, I'm sure THI will eventually begin to create a more relaxing environment, better "ambiance", etc. I view the coffee industry as a sin stocks in disguise - "highly addictive".


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## fatcat

Killer Z said:


> Fatcat, I agree with both you and Canadian. SBUX appears to be able to evolve with the times while THI feeds off of it's Canadian iconic presence. Unfortunately there are only so many locations that THI can open within Canada. I do not believe THI can penetrate the U.S., nor even try to tap the global market.
> 
> However with that being said, the loyalty Canadians have to THI will likely never change, which should allow it to maintain it's market within our borders. If an investor is willing to forego the growth potential, I believe that he/she can benefit from the dividends provided by a few shares should its price drop below $50.


i agree that here is nothing wrong with the stock if you get it a price you like and plan to hold, i suspect tim's will recognize that they need to keep growing the dividend ... starbucks is looking much further down the road and has plans to go well beyond just being a coffee shop

i live in victoria and never go to tim's but i see their outlets at malls and hospitals and there is ALWAYS a lineup


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## Butters

Up2% today

50 Day Moving Average for THI broke out below the 200 Day 

Isn't it suppose to come down now?

50$ may be in range?


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## Synergy

^ it's had a nice little correction so far, down about 10% from it's high point back in April. Looks like there's some support at around $54-55 but you're right, that's a bearish indicator (50 Day MA below 200). However, this was for THI on the NYSE. This hasn't transpired on the TSX as of yet. It may turn out to be a good buying opportunity.


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## Butters

Cant you journal this stock?
So what's the difference! 
Sorry newb questions
But if it drops on one, wouldn't it drop on the other?
I don't have a chart on my phone but it has to be close for the 50 day to cross under 200 on TSX too

I do see value because its down 10% like you say, but it looks like it has about more to slide still, who knows! 
How can people just patiently sit and wait for lower prices haha.


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## Synergy

^ It's really not that close on the TSX - take a look at the charts on Stockcharts.com
http://stockcharts.com/h-sc/ui?s=THI.TO

TSX: 50 DMA ($60.42), 200 DMA ($58.89)

Technically I'm not sure whether the NYSE is more telling than the TSX. Volume is higher on the TSX, not sure if that would have an impact.


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## hystat

bayview said:


> To me Tims & SBUX are in totally different tier from each other. Between the two, it is like Toyota vs Kia in terms of taste, ambience and growth potential. No offence intended.


I don't get that. To me Kia and Toyota offer almost identical products and compete head on for the exact same clientele (except for pickup trucks- Kia doesn't make those). 
Are you saying Toyota has peaked in growth?


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## Canadian

SheaButters said:


> But if it drops on one, wouldn't it drop on the other?


Not necessarily. Changes in exchanges rates affect the price difference of inter-listed stocks. In other words, the spread on THI between the TSE and NYSE can increase x% solely due to exchange rates.


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## Canadian

hystat said:


> I don't get that. To me Kia and Toyota offer almost identical products and compete head on for the exact same clientele (except for pickup trucks- Kia doesn't make those).
> Are you saying Toyota has peaked in growth?


I believe bayview was saying that Toyota and Kia are in two different leagues. I.e., Kia is less expensive, arguably inferior in some aspects of quality or features, and is more of an entry-level car. Maybe the brand comparison was ambiguous.

I could say think comparing Tim's and Starbucks to Kia and Mercedes - now the quality of Starbucks coffee isn't _that_ much better than Tim Horton's - but you should see what I'm getting at regarding different styles, images, markets, etc. despite both selling "coffee".


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## bayview

hystat said:


> I don't get that. To me Kia and Toyota offer almost identical products and compete head on for the exact same clientele (except for pickup trucks- Kia doesn't make those).
> Are you saying Toyota has peaked in growth?


Sorry for late reply. Like Canadian said (thks) I was merely using 2 well known mid level class automakers which most people can identify to reflect their market position and branding image. No I was not alluding that Toyota,s growth is peaking like SBUX. (The automakers industry is another challenging one no doubt.) 

Not everyone has to agreed to Toyota and Kia as the right representation. It can be Ford vs GM, Honda vs Mazda, Iphone v Galaxy/ Blackberry, whatever.

I wouldnt liken SBUX to a Merc like Canadian did. Again nothing wrong. But I would liken the indie cafes with great brews and ambience to Merc or BMW. SBUX Clover ( a premium brew) maybe in this category of luxury cars too but it is not widespread in Canada. 

Branding and products range and quality are all part of analyzing a stock's outlook. In a nutshell it all boils down to a function of the stock's price and earnings potential in determining the stock's value.


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## donald

I just picked up a coffee at the drive-thru and had to take a double take!
Not sure what to make of it but they had a chicken breast sandwich on the menu(not between bread but between a hamburger bun ala like a mc-chicken)
Not sure if winnipeg is the ''test'' market or what(can't find it on goggle)
That is quite the product shift!......next would be fries and a coke to make it a combo or what?


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## Canadian

bayview said:


> I wouldnt liken SBUX to a Merc like Canadian did.


Oh I don't liken Starbucks to Mercedes either. I used the extreme example to make the point crystal clear


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## Synergy

THI boosts dividend by 23%, cuts menu items and drops Cold Stone Creamery. 



> "We have decided to focus more directly on our core business," the company said in a statement about its "ongoing simplification efforts."


I think this is a good start. They need to go back to the basics and simplify their menus. Way too much junk.


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## none

The have stopped carrying the Walnut crunch. This is all I need to know that this stock is headed into the toilet. My advice: dump this stock NOW.


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## Canadian

Probably 75% of my visits to Tim Hortons over the past couple years was to buy a container of Cold Stone ice cream (and no I don't eat _that much_ ice cream - I just rarely ever go to Tim's :stupid. Shame to see it go.

On the other hand - specialty frozen yogurt / ice cream shops have been popping up everywhere over the past couple months. If this is happening in other cities maybe it's a good strategic move for Tim's.


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## doctrine

Judging by the stock reaction, I would say that there is near universal agreement with management's actions and the performance of Tims. Too bad, because I'd really like to get a bite of them but I need a better P/E.


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## bgc_fan

Interesting, I thought that Stone Cold Creamery was a way to leverage their way into the US. Oh never mind, I see it is only in the Canadian franchises. Maybe it just means that Stone Cold Creamery is pulling out of Canada, or reducing their presence.


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## Cal

I think they had a concern that serving the ice cream did not hasten line ups in stores as well.


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## Addy

I'm not convinced this move will pan out for them.

http://www.winnipegfreepress.com/ca...s-by-2018-grow-internationally-247059861.html


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## Synergy

Looks like investors are viewing these new proposed changes as a positive - share price up over 3% today.


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## Cal

http://seekingalpha.com/article/2043943-tim-hortons-buy-its-shares-to-win


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## bayview

The other side:

http://www.bnn.ca/News/2014/2/26/Trouble-Brewing-Why-Agilith-Capital-is-short-Tim-Hortons.aspx


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## marina628

Bought 100 shares of Tim's today .


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## fatcat

a donut store adding "healthier food options" ... sorry, not for me
tim's is tapped in canada and couldn't survive in the usa
mcdonalds, dunkin and starbucks will eat their lunch (not their donuts)
the bnn analyst is dead on ...


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## marina628

Ran out of places to put my money


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## fatcat

marina628 said:


> Ran out of places to put my money


fair enough :tongue-new: ... i want to see you spending a lot more time at tims eating the honey crullers to pump up that top line revenue ... mmmm :very_drunk:


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## marina628

I rarely visit Tim's to be honest as I am diabetic lol


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## Synergy

fatcat said:


> a donut store adding "healthier food options" ... sorry, not for me
> tim's is tapped in canada and couldn't survive in the usa
> mcdonalds, dunkin and starbucks will eat their lunch (not their donuts)
> the bnn analyst is dead on ...


Welcome to the 21st century - burger joints offering salads, fizzy drink companies distributing water, etc. I for one applaud the change towards so called "healthier" options. It should help them appeal to a broader market. Little things like offering almond or soy "milk" instead of regular cows milk, a gluten free desert option, etc. will help them keep pace with the evolving trends.

I don't see a clear winner in this space going forward. I see opportunities in all 3 - MCD, SBUX & THI.


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## marina628

I bought all the junk food stocks in past 12 months .


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## Synergy

^ I like how they performed over the last financial crisis - 2008-2009.


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## fatcat

Synergy said:


> Welcome to the 21st century - burger joints offering salads, fizzy drink companies distributing water, etc. I for one applaud the change towards so called "healthier" options. It should help them appeal to a broader market. Little things like offering almond or soy "milk" instead of regular cows milk, a gluten free desert option, etc. will help them keep pace with the evolving trends.
> 
> I don't see a clear winner in this space going forward. I see opportunities in all 3 - MCD, SBUX & THI.


except the salad and oatmeal thing hasn't worked for mcdonalds, which is why they are struggling to pivot away from what they are ... a burger joint ... and they aren't succeeding, sales show it

the burger joints that are succeeding are doubling down and offering ridiculously fattening mega sandwiches not healthier choices

people who want salads and organic food (especially young people) are eating at chipotle grill which has "food with integrity"

tim hortons is donut shop, they would do better following KFC and creating a 2000 calorie donut sandwich or something similarly ridiculous ... in the end they are a donut shop which is why they are going to sit still and go nowhere

they are maxxed in canada and up against dunkin donuts in the usa who have huge brand rep and are selling at the exact same demographic

starbucks is in a different position since they have a more fluid identity, coffee, chai tea smoothies and various upscale pastries and foods, they are adding juice which a good mix as well and opening tea stores

tim's is donuts and coffee and that's it ... maybe they can pivot but it won't be easy, i think it's a uphill slog

of the 3 i would buy SBUX


----------



## Synergy

KFC actually has more so called "healthier" options than you'd think - roasted chicken breast without skin or breading, rice, green beans, salads, etc. They've actually made strides just like most of the other large fast food chains - towards healthier options. It's such a small portion of their businesses and it's really just a front for all the junk people really want. As in MCD - it helps to appease the salad eating "healthy" parent while the child chows down on a carton of mcnuggets with a big grin.

Personally I don't see an easy road ahead for any of them - the easy money would appear to have been made.


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## fatcat

Synergy said:


> KFC actually has more so called "healthier" options than you'd think - roasted chicken breast without skin or breading, rice, green beans, salads, etc. They've actually made strides just like most of the other large fast food chains - towards healthier options. It's such a small portion of their businesses and it's really just a front for all the junk people really want. As in MCD - it helps to appease the salad eating "healthy" parent while the child chows down on a carton of mcnuggets with a big grin.
> 
> Personally I don't see an easy road ahead for any of them - the easy money would appear to have been made.


right, yes ... and yet people are still pressed for time and sometimes just want eat anything quickly ... mcdonalds has recently actually made a point of showing how they make their chicken mcnuggets (which i would not eat on a bet but still eat the occasional burger) ... they are trying to get out front and be more transparent but i agree that tastes are changing and fast food is a minefield (unless you bought chipotle at the right time)


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## Freedom45

Synergy said:


> ^ I like how they performed over the last financial crisis - 2008-2009.


This is one of the reasons I hold, and am happy to do so. Even in a recession, people still buy their morning coffee. Annual dividend increases, and a decent entry point have my shares yeilding over 3%, along with a decent appreciation in value. I'm not buying more at current valuations, but if at somepoint in the future it gets down into the $40's again, I'll consider adding.


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## Synergy

fatcat said:


> mcdonalds has recently actually made a point of showing how they make their chicken mcnuggets (which i would not eat on a bet but still eat the occasional burger


Indeed, consumer beware! Burgers are definetely the better option here.


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## Mortgage u/w

THI seems overvalued but keeps hanging at 60$. Is it worth buying at this price? I have a hard time accepting the stock at this price....


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## Synergy

^ I think the stock will ultimately go higher. Long term there's no harm starting a small position and buying more on dips.


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## Addy

Freedom45 said:


> This is one of the reasons I hold, and am happy to do so. Even in a recession, people still buy their morning coffee. Annual dividend increases, and a decent entry point have my shares yeilding over 3%, along with a decent appreciation in value. I'm not buying more at current valuations, but if at somepoint in the future it gets down into the $40's again, I'll consider adding.


So true! My husband used to own a coffee shop in Vancouver and said he felt like a drug dealer


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## doctrine

I do not think they can support the rate of dividend increases as their EPS growth is nowhere near dividend growth and payout ratio is rising rapidly. In the long run, a few disappointing dividend increases and revenue/EPS growth of 0-5% and I think it could fall back. I'd definitely like to buy in but even a 3% yield would require a $42 price, not a $62.


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## PatInTheHat

doctrine said:


> I do not think they can support the rate of dividend increases as their EPS growth is nowhere near dividend growth and payout ratio is rising rapidly. In the long run, a few disappointing dividend increases and revenue/EPS growth of 0-5% and I think it could fall back. I'd definitely like to buy in but even a 3% yield would require a $42 price, not a $62.


Count me in agreement with doctrine. Also staying clear.


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## kaleb0

Started a small position (just 100 shares) today, I think it is over sold, it may go down a little more, but I think longer term THI is still poised for some growth.


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## Synergy

Despite not meeting analysts expectations (profit per diluted share of 66c vs an estimated of 68c) I felt that the earnings report was decent: same store sales up 1.6 per cent in Canada and 1.9 per cent in the US, revenues up 4.8%, first quarter profit of $90 million compared to $82.6 last year, etc.


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## leeder

Tim Hortons has traded sideways for the past 6 months or so. I haven't looked too deeply into the latest results, but it seems this company is struggling to grow and is in a very tough, competitive space. Even though the stock price hasn't changed a whole lot, the valuation metrics still show it is expensive. About $50 or less would attract me, at this point.


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## kcowan

Their same store US growth seems to imply that they have got their store mix right. Especially given the flat US economy.


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## Ihatetaxes

I just had someone pick up lunch for me from Tim Hortons. Probably one of the worst sandwiches I have ever had (some new Italian sandwich with a flavourless topping on the bread that went everywhere when I tried to eat it).

Watery coffee, frozen donuts, crappy sandwiches - not a fan.


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## fatcat

i just got back from starbucks and they are a world away from tim hortons but i think a much more forward-looking company 

tim horton's is competing with dunkin' donuts and in the usa dunkin' donuts has an advantage especially since tim horton's is doing nothing to distinguish themselves from dunkin as far as I can see

starbucks seems to serve a fresher experience to younger crowd 

tim horton's is serving an older menu to an older crowd

but as the graphic shows they are all moving in correlation lately

View attachment 522


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## Synergy

Ihatetaxes said:


> I just had someone pick up lunch for me from Tim Hortons. Probably one of the worst sandwiches I have ever had (some new Italian sandwich with a flavourless topping on the bread that went everywhere when I tried to eat it).
> 
> Watery coffee, frozen donuts, crappy sandwiches - not a fan.


It's way beyond my understanding. I don't drink coffee or eat in fast food joints, coffee shops, etc. But, the line ups (inside and out) are astonishing in my region and the brand seems to be fairly well received by a wide range of demographics. Time will tell whether they are able to continue to grow the business.

Lot's of competition so I'm happy to own both MCD and THI and planning on starting a position in SBUX's.


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## OnlyMyOpinion

fatcat said:


> starbucks seems to serve a fresher experience to younger crowd - tim horton's is serving an older menu to an older crowd


That was certainly my experience today when someone one 'treated' me to a starbucks. I chuckle the few times I've been there because they look at me like I'm an alien when I order a "small black coffee". Today the guy yelled back something like 'one tall hmmdbbdah". I said no, I asked for "small". "Oh tall is what we call our small" he said, "or did you want one of these" and held up a smaller cup. Gosh yes, I think what I asked for was a small black coffee.

Definately yuppyville - for those who deserve to 'treat themselves', who buy into the clubby culture of cute names for ordinary things, but wow, get their own name written on the cup when its busy, and cost twice as much as they should.

Oh course what I'm describing sounds like a good recipe for success.


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## Synergy

An interesting read with regards to how THI plans to tackle the US market and views it as a "must win".

http://www.thestar.com/business/2014/05/08/tim_hortons_sees_us_stores_as_mustwin_battle.html



> “We have to be relevant to American consumers,” Caira said, adding the company will strengthen its data insights on consumer tastes. “Typically, Americans like their portions to be a little larger. They like their coffee to be on the lighter side.”





> “We have always expanded by building the restaurants ourselves, putting our own capital in,” he said. “We’re now going to partner with different people that want to do business with Tim Hortons, and there are lots of them. We’re going to use their capital.” That’s the model that the coffee chain has used in Persian Gulf region, partnering with the Apparel Group, which had expertise in real estate and media. “They run the business. They put the capital in, and we collect the royalty,” Caira added.


MCD has done that for years. They even have an all vegetarian restaurant in India. If they run into slower growth in Canada and the US they could eventually consider bringing over a few of their international options.


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## financialuproar

I'm not such a fan of Tim Hortons. Competition from McDonalds and Starbucks, a menu I think is too complicated, temporary foreign worker program being shut down, and so on. I wrote this about the company here http://www.fool.ca/2014/05/01/4-reasons-to-be-bearish-on-tim-hortons/


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## Synergy

^ those are common concerns that have been bought up numerous times over the past few months. They have been working on addressing many of them. Sure there's a lot of competition but I feel that there's room for a few players in Canada. MCD still has a bad reputation amongst many and even though there coffee has improved and is cheaper, a lot a people seem to prefer to go to THI. Tim Horton's does claim to sell 8 out of every 10 cups of coffee in Canada, that's pretty significant. There's also a large demographic who doesn't want to shell out the extra money at a Starbucks and others that abstain from them simply because the whole experience is not what there looking for. I can't predict the future and I like things about all 3 so I'd be happy to own them all.

On a multiple basis, SBUX's is trading at a pretty extreme P/E. If they miss on earnings I could see a pretty good haircut to their stock price.


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## fatcat

financialuproar said:


> I'm not such a fan of Tim Hortons. Competition from McDonalds and Starbucks, a menu I think is too complicated, temporary foreign worker program being shut down, and so on. I wrote this about the company here http://www.fool.ca/2014/05/01/4-reasons-to-be-bearish-on-tim-hortons/


mcdonalds gave away free coffee in April to compete wit taco bells breakfast launch ... it didn't work

tim hortons, mcdonalds and dunkin all have a similar problem compared to starbucks, they all feel cheap with plastic chairs, hard booths and hard surfaces everywhere, where most starbucks have good music, comfortable chairs, cleaner restrooms ... they feel a lot more comfortable and upscale

tim hortons is racing to the bottom by trying to cheapest possible workers where starbucks was a trailblazer in the USA by offering part-timers health benefits and they pay better and treat workers better

tim hortons menu is a mess, they are changing foods constantly and basically turn out the same prepackaged heat and serve food that a 1000 other fast food places do

starbucks uses local suppliers, fresh juices and much better quality food

tim hortons attracts a much lower income demographic than starbucks this affects the feel of the place as anyone who has entered a dunkin donuts will tell you

starbucks is looking ahead and tim hortons is still looking behind, starbucks has very good managers and a good team, they are a company that like apple, want to things first

don't get me wrong, there is good money in selling badly made crap to poor people as wal mart has proved so well (though even they are struggling lately)

i just don't think it is the recipe for success in this space, i think that all things being equal most people will pay an extra dollar for their coffee to have a better experience


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## doctrine

Tim's is definitely catering to a lower income demographic. No news there, but if you believe the larger economic story that incomes are stagnant and the middle class is suffering, then well THI is a great place to make a bet on it. I can afford more expensive places than Tim's, but I still keep going back (and waiting in line). I can get a bagel breakfast sandwich, a donut and a coffee for just over $5. I'll take that any day.


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## fatcat

doctrine said:


> Tim's is definitely catering to a lower income demographic. No news there, but if you believe the larger economic story that incomes are stagnant and the middle class is suffering, then well THI is a great place to make a bet on it. I can afford more expensive places than Tim's, but I still keep going back (and waiting in line). I can get a bagel breakfast sandwich, a donut and a coffee for just over $5. I'll take that any day.


first, you may well be correct but i will say 2 things: look at wal-mart who directly serves a lower income demographic and they have been hit hard by the last 5 years ... rather than saving money at wal-mart people are just not shopping

poor people wont choose tims, they just wont choose anything, they will hold on to their eating out budget

and second, if they are holding on to their eating out budget, they might decide that starbucks is an inexpensive treat and would rather go there 2 times a week and get the upscale experience instead of going to tims 4 times a week for the same old hard surface plastic booth fast food experience

its hard to predict of course who will prevail (which is why they invented etf's i guess) :biggrin:

ps. like mcdonalds and apple, starbucks has extremely high brand awareness and credibility in international markets which is a big push for them ... tims is strictly a local company and that matters in comparing the two i think


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## Synergy

fatcat said:


> i just don't think it is the recipe for success in this space, i think that all things being equal most people will pay an extra dollar for their coffee to have a better experience


I'd argue that the popularity at drive thru windows may indicate that a good portion of the population may not care all that much about the "experience" (comfy chairs, fireplace, etc.). Perhaps they just want to get their fix on the way to work and the experience is simply to get the caffeine flowing into their veins as fast as possible! 









I'm no coffee connoisseur so I can't comment on the quality or taste but I do know that Tim Horton's sells a lot of coffee and some people really like their Tim's. I'm not about the try and change the world, if people like to drink so called "bad" coffee then so be it.


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## Synergy

When it comes to cheap food and drinks, MCD is a good example how a company offering cheaper convenience food can withstand an economic downturn. Check out their performance over the 2008/09 crash. THI seemed to fair okay over that time period as well - compared to the TSX. Java will likely be one of the last things people give up.


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## OnlyMyOpinion

fatcat said:


> poor people wont choose tims, they just wont choose anything, they will hold on to their eating out budget


No, not very likely.



fatcat said:


> and second, if they are holding on to their eating out budget, they might decide that starbucks is an inexpensive treat and would rather go there 2 times a week and get the upscale experience instead of going to tims 4 times a week for the same old hard surface plastic booth fast food experience


No, even less likely.


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## fatcat

Synergy said:


> I'd argue that the popularity at drive thru windows may indicate that a good portion of the population may not care all that much about the "experience" (comfy chairs, fireplace, etc.). Perhaps they just want to get their fix on the way to work and the experience is simply to get the caffeine flowing into their veins as fast as possible!
> 
> View attachment 530
> 
> 
> I'm no coffee connoisseur so I can't comment on the quality or taste but I do know that Tim Horton's sells a lot of coffee and some people really like their Tim's. I'm not about the try and change the world, if people like to drink so called "bad" coffee then so be it.


i started a ran a coffee business and roasted my own coffee many years ago and knew the founders of starbucks so that explains part of my bias and i don't live near a tims (i seem to only use them at the hospital where the lines are always long) ... perhaps the market will be big enough for all of them (mcd,thi,sbux,dnkn) ... years ago, denny's used to have excellent coffee because they had a contract for a blend with real kona coffee in it

i have tried mcdonalds coffee and was surprised at how good it was

when it comes to drive in i suspect that location and speed of getting through the line will probably trump the price ... whoever is convenient and fast will get the business

somebody who when walking in a neighbourhood will be loyal to starbucks will easily shift to micky d's if they are convenient which is what drive through is all about


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## feetfats

fatcat said:


> i have tried mcdonalds coffee and was surprised at how good it was


I've talked to lots of people that have had that same experience. McDonalds coffee is my favorite coffee when I am away from home. I like the fact that it tastes great, isn't too strong, and has been very consistent throughout the different locations that I have been to. I can't say so much for their food, except for the chicken nuggets lol. 

I make tim hortons coffee at home with a press but I don't like the way the restaurant makes it, way too strong for me.


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## donald

I like mcd coffee also but the one thing I can't understand is(and maybe this is just a wpg thing!)is I always hear the hoopla about mcd coffee(media and friends)however.....I never see a line-up!i am a shareholder in mcd and I like the mccafe offering but it boggles my mind,even on the free coffee days I don't see a line.
I also work in construction(lots of trades-100's of guys working ect,nearly everyone drinks take out)if I see a mcd coffee cup amongst the hundreds of cups in the bins and around site etc it is a sight to be seen(rare)starbucks-never(maybe us trade guys are not the demo,fine but even still)
I do happen to drink tim's coffee everyday(2)and I honestly don't mind it but than again I am the type of guy that doesn't mind Maxwell instant coffee either lol(sometimes)One thing is for sure though(I think for some reason people don't like admitting for some reason)tim's is always and I mean always busy,i don't think I have ever seen a empty line in my life.
I agree with the menu(it is all over the place and is a absolute mess-esp new offerings)they need to simplify that imo
One last thing,i tried a chicken 'burger' from tim's the other day and honestly not that bad!better tasting than a mc-chicken and somewhat reminded me of something you might have in a sit down restaurant(it was fresh)


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## Synergy

fatcat said:


> i started a ran a coffee business and roasted my own coffee many years ago and knew the founders of starbucks so that explains part of my bias


In my community there's a small family run coffee shop that has their own plantation, supposedly great food, deserts, etc. They're always busy and very popular with the locals, but for the most part I view them as competition for a place like Starbucks. The masses still seem to wait in line at one of the local Tim's.


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## Synergy

donald said:


> I like mcd coffee also but the one thing I can't understand is(and maybe this is just a wpg thing!)is I always hear the hoopla about mcd coffee(media and friends)however.....I never see a line-up!i am a shareholder in mcd and I like the mccafe offering but it boggles my mind,even on the free coffee days I don't see a line.


Same, I here people praising the new coffee at MCD all the time but I still don't see much traffic for the morning java run as compared to the local Tim Horton's. MCD appears to have somewhat of a bad stigma with certain generations and I think some people may feel more comfortable going to a traditional coffee shop. Branding - burgers & fries, versus coffee & donuts.


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## fatcat

Synergy said:


> In my community there's a small family run coffee shop that has their own plantation, supposedly great food, deserts, etc. They're always busy and very popular with the locals, but for the most part I view them as competition for a place like Starbucks. The masses still seem to wait in line at one of the local Tim's.


true enough but don't look at the present look at the future and in canada tims is reaching saturation 

where they going to go from here? ... they have no international focus other than the usa where they will be playing with the big boys 

and they are under assault at home on all sides where good real estate is getting harder to find and more expensive 

this is from a university of michigan marketing study (http://www.slideshare.net/keels223/t...rtons-15819826):


> Identiﬁcation of the problem: while tim hortons does a great job of attracting the segment of consumers that are “on the run,” they disregard several other segments of coffee drinkers who need a comfortable space to spend time and “call their own” when buying and consuming coffee.


finally, i would compare the customer experience in both establishments tim hortons workers turn over at a high worker and the company is importing foreign workers who aren't going to deliver the customer experience that tim's new president (marc caira) says they need (http://blogs.windsorstar.com/2014/02/17/tim-hortons-at-a-caffeinated-crossroads/) :



> he said the customer experience at the counter was a “moment of truth” that would determine whether they were satisfied enough to come back again.
> 
> “future battles are not going to be won, in my view, with who has the best strategy or who has the best innovation,” caira said.
> 
> “the companies that will win will be the companies that can execute flawlessly at the store level.”


on the other hand starbucks staff retention is unprecedented in the quick-service restaurant sector.


> the employee turnover rate at starbucks, according to some reports, is 120 percent less than the industry average. .... "starbucks employees have an 82% job-satisfaction rate, according to a hewitt associates starbucks partner view survey. this compares to a 50% satisfaction rate for all employers and 74% for hewitt's 'best place to work' employers."


i all areas of successful businesses we are seeing businesses up their game and provide better customer experiences 

starbucks has a huge lead over tim's in this regard 

perhaps tim's will catch up but i think starbucks is the better bet


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## Synergy

fatcat said:


> true enough but don't look at the present look at the future and in canada tims is reaching saturation


Agreed. That's why I'd be happy to own a few of the coffee players - MCD, THI & SBUX's. Part of me would like to see THI continue to do well - a good solid Canadian company. I do however wish they would get rid of the crappy food / menu and stick to the basics - KISS. But then again if I had my way nobody would probably eat there - too healthy. Going forward I agree that SBUX's appears to be in better shape to grow their business. The valuation still scares me a little, but I guess sometimes you have to anti up.


----------



## bgc_fan

fatcat said:


> true enough but don't look at the present look at the future and in canada tims is reaching saturation
> 
> where they going to go from here? ... they have no international focus other than the usa where they will be playing with the big boys


They are doing an expansion in the Middle East. It seems kind of random, but it's another market. Personally, I thought a store or two in Hong Kong or other places with an abundance of Canadian ex-pats would be interesting. If one is a shareholder, one should be glad that they're continuing expansion as opposed to the direction that they should stop and just concentrate on Canada. As you've pointed out, there is a bit of saturation in Canada.



fatcat said:


> on the other hand starbucks staff retention is unprecedented in the quick-service restaurant sector.
> i all areas of successful businesses we are seeing businesses up their game and provide better customer experiences
> 
> starbucks has a huge lead over tim's in this regard
> 
> perhaps tim's will catch up but i think starbucks is the better bet


For workers perhaps, but when it comes down to location and price, I'd say that Tim's is a better bet. As another example, for business meetings, I'd find it easy and cheaper to purchase a box of coffee and some donuts or timbits than to go to Starbucks.


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## fatcat

Synergy said:


> Agreed. That's why I'd be happy to own a few of the coffee players - MCD, THI & SBUX's


be patient, i'm sure we'll see a retail coffee ETF any day now :biggrin:


----------



## donald

bgc-i read years ago(it stuck)that Tim's at first had satellite stations for the canadian troops(for comfort)I think(maybe i am being bright eye'd)that THI actually did do this at first without be driven profit minded(i think expansion went from there)I might be wrong though.


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## bgc_fan

I can see the original presence due to the mission to Afghanistan, and subsequently getting US troops hooked on the coffee, leading to opening a store at Fort Knox. It doesn't quite explain expanding in the Middle East with little Canadian or official US presence.


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## londoncalling

Synergy said:


> Same, I here people praising the new coffee at MCD all the time but I still don't see much traffic for the morning java run as compared to the local Tim Horton's. MCD appears to have somewhat of a bad stigma with certain generations and I think some people may feel more comfortable going to a traditional coffee shop. Branding - burgers & fries, versus coffee & donuts.


I have timed the drive thrus at both locations on a busy morning. MCD is faster moving on their debit transactions. I think in Canada Tim's will always be busier in most locales but internationally MCD is the winner. Own neither stock but either is a decent one to hold.


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## fatcat

londoncalling said:


> I have timed the drive thrus at both locations on a busy morning. MCD is faster moving on their debit transactions. I think in Canada Tim's will always be busier in most locales but internationally MCD is the winner. Own neither stock but either is a decent one to hold.


micky d is known for being very fast with their ordering ... it's one of the strong points of their brand

tims needs both a better customer experience and a faster one I think


----------



## donald

tim's does have(in wpg)the two lane system and i wonder if it works as well as the two window system(which mcd has)
the 2 lane system cuts down i suppose the traffic(maximizes space)but then they i notice only serve rotating back and forth on each intercom(why?-where the hell is the staff if you are going to spend millions than get bodies in place)and than of course it funnels back into one lane(you can tell a lot about a person if they cut you off lol)......i think it somewhat gives tim's this false perception they are speeding things up when in fact they have essentially done nothing to solve the problem(unless they did it for more cars to 'fit')
Compare that with mcd-one intercom and a efficient dual window system that is flawless in quick serve(why tim's didnt copy this seems like odd imo!not that bright upstairs in corporate imo)
Tim's management seems a bit weak in executing(the menu,as brought up)is a mess-like reading a newspaper,so much **** going on
again this is also where mcd shines,the menu is flawless,simple and easy to understand
seems like corporate talent(executing)is by far the weakest of the 3(vs sbux/mcd)
They also got to figure out the garbage(containers after intercom)that is the most disgusting thing,have them but know people are messy!incorporate a garbage system that is different(dirty!)never see that type of **** at mcd or sbux


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## doctrine

I find the hate for Tims here interesting. You'd think the stock would be cheaper, which would be good for me, but unfortunately I think the corporate world recognizes the brand power and addiction of Tims. With all of the comparisons to SBUX and MCDs, did anyone consider that Tim's is also 1/8th the size of Starbucks and 1/12th the size of McD's? Even if they don't get that big, what are the odds that McD's and SBUX can double, triple or even quadruple the number of restaurants? Four McD's in a Walmart?

While we ponder this, I am off to Tim's for breakfast.


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## AltaRed

doctrine said:


> I find the hate for Tims here interesting. You'd think the stock would be cheaper, which would be good for me, but unfortunately I think the corporate world recognizes the brand power and addiction of Tims.


I think it is partly the mystique of Tims, and partly the lack of meaningful consumer choices on the TSX, particularly 'consumer staples'. Once one sets aside the 'consumer discretionary' sector like the retailers, there is not much beyond the unsexy and long standing Westons, Loblaws, Metros, Saputos to choose from. One can argue even these latter ones are expensive relative to US offerings.


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## fatcat

doctrine said:


> I find the hate for Tims here interesting. You'd think the stock would be cheaper, which would be good for me, but unfortunately I think the corporate world recognizes the brand power and addiction of Tims. With all of the comparisons to SBUX and MCDs, did anyone consider that Tim's is also 1/8th the size of Starbucks and 1/12th the size of McD's? Even if they don't get that big, what are the odds that McD's and SBUX can double, triple or even quadruple the number of restaurants? Four McD's in a Walmart?
> 
> While we ponder this, I am off to Tim's for breakfast.


who knew you had the tim horton baseball cap and the t-shirt too ?

really ? actual hatred for tim hortons ? ... life's too short doctrine ... i do like their honey crullers a lot if that helps

if we are looking at the long term investment potential of coffee chains tims comes out poorly, neither sbux or mcd need to even come close to doubling their size let alone tripling

the problem is that tim's is going to have trouble even increasing their stores by 20% let alone 50%
they have 4500 stores +/- (lets not forget their big push into the middle east where they have, what ? ... 14 stores)
all of their stores are in one country essentially where store locating and growth is going to be a hard slog

they have no international experience _at all_
the only market they can really push into is the usa where competition will be brutal from mcd, sbux and dunkin as well as millions of small independents (remember tim's just offers average coffee, donuts that aren't even made on the premises and pre-made food of a quality you can find in millions of restaurants in north america ... they are unknown in the usa so the brand doesn't mean diddly)

sbux is an international company with a world famous brand, excellent customer service and cutting edge marketing and branding, they own their retail tea subsidiary and fresh juice subsidiary

i buy equities to make money ... i would rather be proven wrong and make money than the reverse
i would buy shares in THI in a heartbeat and start drinking their coffee to boot if i thought i would grow my investment

i don't see the value in this brand ... it does nothing unique, it's a small regional fast food chain and they offer a product that is pre-made, pre-packaged and heated and served (by often unhappy people in ugly uniforms who leave their jobs fairly quickly because the pay is low and it's just another fast food joint) which is something hundreds of other fast food competitors do

their prospect for expansion and revenue growth are daunting at best

the fact that a huge number of people in canada like you love this brand just isn't enough


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## Synergy

fatcat said:


> tim hortons, mcdonalds and dunkin all have a similar problem compared to starbucks, they all feel cheap with plastic chairs, hard booths and hard surfaces everywhere, where most starbucks have good music, comfortable chairs, cleaner restrooms ... they feel a lot more comfortable and upscale


Seems like TIm's has been rolling out some new designs - more upscale (check), acces to soft cushy chairs (check), cleaner look (check), etc.
http://vmsd.com/content/rail

It appears like McDonald's has rolled out some makeover's as well:
http://www.nouveaubaltimore.com/services/case-study-mcdonalds/
http://neighborsgoblog.dallasnews.com/2010/11/new-mcdonalds-in-irving-is-sup.html/

Look pretty nice to me, at least for fast food joints.


----------



## Ethan

I think the reason for the two lane drive thru was to prevent drive-thru lines from spilling onto the streets. That happened quite a bit with the single lane drive-thru's which caused traffic problems. Municipalities were looking into ways to ban Tim's drive-thru's, as well they were more reluctant to approve building permits for new Tim's. Tim's is making a conscious effort now to get as many drive-thru customers off the streets as possible to avoid a fight with the municipalities. I don't think it has anything to do with speeding up the drive-thru process.


----------



## Synergy

^ You're probably right. Two lanes will also create somewhat of an illusion - perceived shorter lines, when in fact wait times may not change to any significant degree. 

A coffee only lane may help speed things up but then how can they up sell the customer!


----------



## bgc_fan

Synergy said:


> A coffee only lane may help speed things up but then how can they up sell the customer!


I was in Tim's the other day and they do have an express line up during peak hours for coffee only orders. I don't know if it's widespread, but it was something I thought was an interesting idea. I suspect something like that for the drive through would work.


----------



## fatcat

Synergy said:


> Seems like TIm's has been rolling out some new designs - more upscale (check), acces to soft cushy chairs (check), cleaner look (check), etc.
> http://vmsd.com/content/rail
> 
> It appears like McDonald's has rolled out some makeover's as well:
> http://www.nouveaubaltimore.com/services/case-study-mcdonalds/
> http://neighborsgoblog.dallasnews.com/2010/11/new-mcdonalds-in-irving-is-sup.html/
> 
> Look pretty nice to me, at least for fast food joints.


yes, i agree and this is the future ... customer experience and customer retention and loyalty is key 

at the risk of trying to hammer my point again, these guys are both copying something starbucks was doing 20 years ago ... great, it's good to see and smart (i know that second cup which has had problems lately is also going to new decor and comfortable chairs in newer stores) ... 

don't get me wrong, fast food joints with plastic chairs can be very good investments and much better than upscale restaurant chains, i include a graph that shows ruth chris steakhouse since going public versus micky d's, you would definitely want to own mickeys

View attachment 538


coffee consumption is a unique space, it's an addicting and potentially very expensive beverage that it is usually consumed every single day by its devotees 
but starbucks is now stepping outside of the mere coffee space by being a beverage place (teas and tea bars, fresh juices as well as coffee), a rest stop and place to meet people and chat (many people choose starbucks just so they can use a clean restroom) and they are offering locally sourced fresh food as well as their own line of energy bars ... their marketing and graphics are always first rate and cutting edge ... they continue to make the "best places to work" lists ... i think they are a great consumer discretionary choice but who knows, no one can predict the future

i hear it's getting too hot to grow coffee in brazil which produces a 1/3 of all the coffee grown in the world, that could throw a real monkey wrench into supply and costs and therefore retailing


----------



## donald

That makes logical sense ethan,I wonder though did they split costs?that is a huge capital expense(the retro fitting)would all parties not know in property and planning/zoning stage?
I would be curious to know if that is true(and that is likely)who's problem was that(tim's real estate team?)how many tens of millions were spent.
That could not logically fall all on THI shoulders?from a shareholders prospective(maybe that didn't erode anything but that is quite expensive)
who's whoops is that?it's not like there are not stats and projections(number of cars)


----------



## Synergy

fatcat said:


> starbucks is now stepping outside of the mere coffee space by being a beverage place (teas and tea bars, fresh juices as well as coffee)


Don't forget alcohol! With the margins on alcohol that should help their bottom line. Add one more addicting substance to the list ;o)

You don't have to sell me on SBUX - i like the business.


----------



## Ethan

This article says the reason behind double drive-thru's was both to get cars off the road and to speed up the process, although the expert interviewed says that it won't speed up the process. It makes sense to me that things won't speed up, customers can order twice as fast but there's still only 1 payment/pickup window and nothing has been done to speed up food preparation.

The article also mentions how Tim's met with Saskatoon city council to discuss the lanes and to ease concerns about drive-through traffic safety in the city.

http://www.macleans.ca/economy/business/double-double-lanes/

@donald I believe Tim's paid for 100% of the costs.


----------



## Synergy

donald said:


> That makes logical sense ethan,I wonder though did they split costs?that is a huge capital expense(the retro fitting)would all parties not know in property and planning/zoning stage?
> I would be curious to know if that is true(and that is likely)who's problem was that(tim's real estate team?)how many tens of millions were spent.
> That could not logically fall all on THI shoulders?from a shareholders prospective(maybe that didn't erode anything but that is quite expensive)
> who's whoops is that?it's not like there are not stats and projections(number of cars)


I'm not sure who's going to be footing the bill, but the reno's will only take place for outlets built in 2012 and onward.


----------



## Tom Dl

I don't know if it will hurt their bottom line but the customer experience at Tims has gone down the past decade. Nome of my kids will eat their stuff any more. And I can often not tell what flavour of donut I am eating unless I look at it. Their decision to centrally bake their goods killed their food. The coffee isn't as good as MCD, and that was not the case in the past. And they have a number of ordering peculiarities like asking you what donuts you want at a pay station when you aren't even in front of the donuts. Let's say I want a dozen, a variety, am I supposed to real off the ones I want when they can't even always find them on the shelves?

They increase their prices like the Post Office, or Dollarama, which speaks of a sense of entitlement. They are owned out of the US, and those guys apparently don't know anything. They were never my favourite donut store, but they did succeed in running the others out of business, at which point they stopped worrying about their own products.

I get sick of them being given special canadian status along with other stuff like the Canada arm, and the Avro Arrow, that is stuck in the past. I am surprised the gov didn't bring back the two dollar bill so that they could slap a Tims on it, or wait, maybe Blackberry.


----------



## PuckiTwo

Tom Dl said:


> I don't know if it will hurt their bottom line but the customer experience at Tims has gone down the past decade. Nome of my kids will eat their stuff any more. And I can often not tell what flavour of donut I am eating unless I look at it. Their decision to centrally bake their goods killed their food. The coffee isn't as good as MCD, and that was not the case in the past.


And on top of that all the Tim's garbage you find everywhere - our town and its surrounding is littered with Tim Horton cups and bags, in the middle of the town, you find their cups on shelves in grocery stores, in parks, in the woods - awful. I consider Canada as one of the cleaner countries in the world but Tim Horton has certainly put a dent in that.


----------



## Homerhomer

PuckiTwo said:


> I consider Canada as one of the cleaner countries in the world but Tim Horton has certainly put a dent in that.


It's not TH fault that some of their customers are bleeping ignorant pigs.


----------



## Synergy

Homerhomer said:


> It's not TH fault that some of their customers are bleeping ignorant pigs.


I completely agree, but I do feel that Tim's needs to become part of the solution. The "please do no litter" writing on the cups, closed loop recycling programs, promoting re-useable mugs, etc. is good, but it doesn't seem to be cutting it. A lot of people are now recycling their tim's cups, which is also good but on a windy day or throughout the winter the recycling bins often tip over and the recyclables with a little help of mother nature litter the world. Someone really should mandate some sort of biodegradable bag for recyclables or manufacture a lid for recycling bins.


----------



## Homerhomer

We are all part of a problem, and can all be part of the solution ;-) There is plenty the governments, corporations and individuals can do to limit the damage we cause to the environment ;-)
Good ideas Synergy, I think the lids for recycling bins are great idea, so are biodegradable bags.

However I clearly remember the uproar in Toronto when the stores were mandated to charge few pennies for plastic shopping bags ;-)


----------



## Synergy

Homerhomer said:


> However I clearly remember the uproar in Toronto when the stores were mandated to charge few pennies for plastic shopping bags ;-)


I here ya, people don't like change much - especially when it comes with a price tag! Here's to hoping that people remember to bring their re-useable bags to the grocers, etc. All too often people forget their bags in the house, car, etc, and just by more. Pretty soon they have a car and garage full of re-usable bags! According to some literature I've read in the past, cotton reusable bags have to be reused 131 x's to match the environmental performance of conventional plastic shopping bag and a non-woven polypropylene bag has to be reused 11 times. The non-woven PP bags are pretty sturdy and last a long time so they should be the clear winner, especially considering they can be recycled and made into new bags.


----------



## PuckiTwo

Homerhomer said:


> It's not TH fault .......





Synergy said:


> ..... but I do feel that Tim's needs to become part of the solution. The "please do no litter" writing on the cups, closed loop recycling programs, promoting re-useable mugs, etc. is good, but it doesn't seem to be cutting it.


Maybe "fault" is not the right word but Tims is certainly the cause of the problem and I agree with Synergy that they need to become part of the solution - in a big way. I don't think you can blame it all on the customer. Why is it that you see much less MacDonalds garbage? Simply compare Tim Hortons shops with MacDonalds. There is not one Tim Hortons' I know in this neck of the woods which has clean washrooms, the seating areas look uncared for. We know one local Tims' owner with several shops - he doesn't care if the garbage is overflowing, the floors are not clean, etc. The MacDonalds are always cleaned on a very regular basis, there are enough garbage cans, they are cleaned out consistently. 

So the owner and management - so the customer. 
And there are solutions - other parts of the world can show us. In some countries in Europe: if the company creates garbage (packaging, etc) they are responsible for getting rid of it. Yes, the customers have to bring it to their deposit stations but you do not see that kind of garbage on the streets you are seeing here. Nobody would bring their kids to a dirty place.


----------



## Synergy

Tim Hortons to accept smartphone payments at all restaurants
http://www.vancouversun.com/busines...phone+payments+restaurants/9866636/story.html


----------



## Synergy

Good numbers out for THI - Q2 2014
http://www.newswire.ca/en/story/139...nces-2014-second-quarter-results?relation=org


----------



## Kaitlyn

Synergy said:


> Good numbers out for THI - Q2 2014
> http://www.newswire.ca/en/story/139...nces-2014-second-quarter-results?relation=org


Loving the nice boost today! not quite at the all-time high, but still good!


----------



## Synergy

Kaitlyn said:


> Loving the nice boost today! not quite at the all-time high, but still good!


Closed at an all time high! Some of the new stores are looking pretty nice in my neck of the woods, lots of complete reno's taking place.


----------



## Addy

Considering they are planning to open boutique style stores that serve alcohol... I may just hang on to my THI for now.


----------



## Synergy

THI -dark roast coming to a store near you:



> The alternative brew was first sold late last fall in Columbus, Ohio and London, Ontario, and then in the province of Quebec in June. It will be offered at all 4,496 restaurants across Canada and the United States starting Friday.
> 
> "There's about 38 to 40 percent of coffee drinkers that are looking for a darker roast," said Caira. "Those are very intriguing numbers for us ... If we weren't pleased with the (initial) numbers, we wouldn't be launching it."


source: http://ca.reuters.com/article/businessNews/idCAKBN0GE2FN20140814


----------



## Kaitlyn

Synergy said:


> THI -dark roast coming to a store near you:
> 
> 
> 
> source: http://ca.reuters.com/article/businessNews/idCAKBN0GE2FN20140814


Ah, this was a Tim Hortons event in my building this evening. Something about enter the dark/into the dark or similar. Guess that's what it's about!


----------



## leeder

Burger King in talks to acquire Tim Hortons. Thoughts?


----------



## fatcat

leeder said:


> Burger King in talks to acquire Tim Hortons. Thoughts?


probably a good idea ... they can loose a bunch of the management overlap, have more real estate clout, cross promote each others brand, run promos together

off topic a little, i am a big starbucks booster but i sure did get a great cup of coffee at mcdonalds the other day

maybe tim will step up burger kings coffee game

burger king makes the best fast food hamburger imo


----------



## doctrine

Sounds like Wendy's all over again. How long before they are divested, 5 years?


----------



## HaroldCrump

doctrine said:


> Sounds like Wendy's all over again. How long before they are divested, 5 years?


11 years, I believe


----------



## HaroldCrump

The Burger King move seems to be motivated primarily by tax inversion.


----------



## SkyFall

wow up over 16% at the moment in premarket


----------



## Kaitlyn

We're at +18% open

Never held a stock included in this sort of news. Do you just sell or keep holding? it could not go through and just drop back down, or mean even better growth over the next years if it happens

It SOUNDS like it's likely happening...?


----------



## leeder

I would assume it'll go to shareholder vote. I don't know if I like the deal. In my opinion, Burger King benefits more than Tim Hortons. If I were a shareholder of THI, I would sell... but that's just me.


----------



## Synergy

Kaitlyn said:


> We're at +18% open
> 
> Never held a stock included in this sort of news. Do you just sell or keep holding? it could not go through and just drop back down, or mean even better growth over the next years if it happens
> 
> It SOUNDS like it's likely happening...?


Up over 20% as I type. This came to a surprise to me. Looks like BKW is trying to take advantage of a tax loophole. I'm on the fence, I like the THI brand but I'm not so keen on BKW at this point. I may not sell my shares at this point, but I'm considering putting in a stop loss. Let's see how this plays out...


----------



## Kaitlyn

Synergy said:


> Up over 20% as I type. This came to a surprise to me. Looks like BKW is trying to take advantage of a tax loophole. I'm on the fence, I like the THI brand but I'm not so keen on BKW at this point. I may not sell my shares at this point, but I'm considering putting in a stop loss. Let's see how this plays out...


I feel in a very same boat. Not a holder and never planned to hold BKW... just not a fan of the business.\

THI has been enjoying nice growth recently and I'm just not sure if this would tarnish the brand/expansion or pour gasoline on the fire (I hope!)


----------



## marina628

Up 38% on my March Purchase ,wish I bought more now lol


----------



## AltaRed

I'd sell if I had any. Grand opportunity to sell high based on current enthusiasm and then buy back at a lower price if the deal unwinds or reality sets in....or stay out altogether. Owning BKW would be nothing but indigestion in my opinion. I go to BK maybe once per 5 years to reinforce why I still do not like it.


----------



## HaroldCrump

NDP Finance critic Peggy Nash has set up a news conference for this afternoon to "express some concerns" :biggrin:


----------



## Ethan

I sold my shares after this morning's 20% pop. With the uncertainty surrounding what will happen, I took the gains and redeployed elsewhere.


----------



## SkyFall

Ethan said:


> I sold my shares after this morning's 20% pop. With the uncertainty surrounding what will happen, I took the gains and redeployed elsewhere.


I think I would have done the same


----------



## Nemo2

SkyFall said:


> I think I would have done the same


As I said to my wife "I would never have bought them, but I sure would've sold them (today)".


----------



## doctrine

AltaRed said:


> I'd sell if I had any. Grand opportunity to sell high based on current enthusiasm and then buy back at a lower price if the deal unwinds or reality sets in....or stay out altogether. Owning BKW would be nothing but indigestion in my opinion. I go to BK maybe once per 5 years to reinforce why I still do not like it.


I would like to own THI. I would also look at BK as any other investment. However, based on the numbers (esp THI), both individually and combined are at a sky high valuation. If I owned, I'd definitely sell into the pop. The transaction will go through for sure, but who knows what the long term motivation of 3G Capital is going to be who will own a majority of the combined corporation. Too many questions. How are they going to improve THI's sales? Maybe they milk the operations and expand BK. Maybe they try to sell BK burgers at Tim Hortons. Maybe they try and sell Tim's coffee at BK. It might work, or they might destroy each other's brands. Too much unknown/risk for a very high valuation, and it's not like both organizations were bloated with management either. Why is Tim's ownership selling out? Not interested in slowing growing the brand as a long term investment? Ugh. They got their 20% short term boost they wanted, if I was a shareholder I'd take management's cue and follow suit.


----------



## FrugalTrader

I sold half my position today.


----------



## fatcat

HaroldCrump said:


> NDP Finance critic Peggy Nash has set up a news conference for this afternoon to "express some concerns" :biggrin:


and they wonder why they can't form a government ?

i get the issue with resource companies, i see the argument and partly buy it

but ... a donut shop ? ...mediocre frozen donuts that are heated to order ?

a press conference ? ... really ?

"gimme that damn microphone, i'm an mp and i have lots on my mind ! "


----------



## Synergy

Will be interesting to see how the stock trades over the next few days. I'm hearing a lot of mixed opinions...


----------



## Synergy

This just made thing even more interesting:



> Warren Buffet to help finance Burger King and Tim Hortons merger


http://www.theglobeandmail.com/repo...im-hortons-merger/article20202649/?cmpid=rss1


----------



## indexxx

fatcat said:


> burger king makes the best fast food hamburger imo


I'm for Harvey's


----------



## Freedom45

I re-balanced my portfolio based on the bump in THI's price yesterday. Sold about 1/5 of my position.



Synergy said:


> This just made thing even more interesting:
> 
> http://www.theglobeandmail.com/repo...im-hortons-merger/article20202649/?cmpid=rss1


Thoughts on this? If it makes another jump today, I may end up selling the remainder of my position. I bought a few years back in the $40-41 range, so I'm in pretty good shape as it is. The BK uncertainty isn't something I have warm feelings about...


----------



## Jungle

Freedom45 said:


> I re-balanced my portfolio based on the bump in THI's price yesterday. Sold about 1/5 of my position.
> 
> 
> 
> Thoughts on this? If it makes another jump today, I may end up selling the remainder of my position. I bought a few years back in the $40-41 range, so I'm in pretty good shape as it is. The BK uncertainty isn't something I have warm feelings about...


Buy out is now approved by both board of directors @ 89/ share.

Buh-buy timmies!


----------



## Synergy

Looks like we may get another little bounce today - pre-market trading in the US is showing a 11% gain.

Burger King Worldwide Inc announces deal to buy Tim Hortons:



> The price deal values each Tim Horton share at $94.05 based on Burger King’s closing price Monday


http://business.financialpost.com/2014/08/26/burger-king-tim-hortons-deal/


----------



## Freedom45

Deal values THI shares at $94.05.

http://business.financialpost.com/2014/08/26/burger-king-tim-hortons-deal


----------



## Synergy

Freedom45 said:


> Deal values THI shares at $94.05.
> 
> http://business.financialpost.com/2014/08/26/burger-king-tim-hortons-deal


Looks like you beat me to it / while I was typing! I'm still not convinced I want to own shares in Burger King. I will be doing a little bit of research on this...


----------



## Freedom45

It it makes a bump into the $92-95 range I may dump the remainder of my position. I could hold, and the cash from the sale alone would offer me a great return, along with the shares of the new "TimBurger?", but I'm not convinced I want to own BK. May take my money and run...


----------



## the-royal-mail

Up over 7.5% or at $89.65 this morning already. Could be good for short-term trades and quick profits.


----------



## liquidfinance

I was expecting this to open at $94 today. 

Is there the chance of a free lunch here?


----------



## dotnet_nerd

But Tim's was already married to a burger choke-and-puke (Wendy's) and they ended up splitting off.

Why will it be different this time?


----------



## Addy

liquidfinance said:


> I was expecting this to open at $94 today.
> 
> Is there the chance of a free lunch here?


The $65 or so buy out plus stock in the new company makes my family very happy. Very, very happy.


----------



## swoop_ds

I have some Tim Horton shares held through a transfer agent and they are dripping away every quarter. How does this effect me?


----------



## Synergy

liquidfinance said:


> I was expecting this to open at $94 today.
> 
> Is there the chance of a free lunch here?


I think the share price will eventually creep higher, there is value at the $94 price tag. I think there's still seller's that are happy with the current gain and may not want to hold BKW shares going forward, once they're all gone perhaps the share price will grind a little higher?


----------



## Synergy

dotnet_nerd said:


> But Tim's was already married to a burger choke-and-puke (Wendy's) and they ended up splitting off.
> 
> Why will it be different this time?



I guess you could say, "third time's the charm" or "3 strikes and you're out"! Wendy's 1995 - strike 1, Cold Stone Creamery 2009 - strike 2, and now Burger King 2014???


----------



## fatcat

both companies face huge challenges 
tims didn't do this because they were having fun

they did it because they are facing a large uphill battle getting traction in the usa and they need bk's real estate skills and knowledge of that market

the low end burger market (mcd,wendy,bk,jack,aw,dairy queen) is really competitive and is being hammered at by fast casual

maybe they have some kind of international push in mind and want to make tim's an upscale brand ?

i'd sell my shares and buy mcd if i wanted to stay in that segment 
but i have my doubts about mcd also

many of these guys are trying to move their game up and get out of the fast food businesses


----------



## Addy

fatcat said:


> both companies face huge challenges
> tims didn't do this because they were having fun
> 
> they did it because they are facing a large uphill battle getting traction in the usa and they need bk's real estate skills and knowledge of that market
> 
> the low end burger market (mcd,wendy,bk,jack,aw,dairy queen) is really competitive and is being hammered at by fast casual
> 
> maybe they have some kind of international push in mind and want to make tim's an upscale brand ?
> 
> i'd sell my shares and buy mcd if i wanted to stay in that segment
> but i have my doubts about mcd also
> 
> many of these guys are trying to move their game up and get out of the fast food businesses


This, plus there was an announcement a few months ago Tim Hortons was considering opening a few Boutique Cafe's (or whatever you want to call them) where they serve alcohol. I think the targets were major cities. I'd like to see something like this open in Vancouver.


----------



## Synergy

Looks like the cash option will be $88.50. As long as the deal goes through there doesn't appear to be much downside risk at these levels (current price: $88.71). I prefer MCD over BKW so I'll likely opt for the cash option or sell into any further strength ($92-94). I'm considering MCD and SBUX as an alternative should the deal eventually go through.


----------



## fatcat

Synergy said:


> Looks like the cash option will be $88.50. As long as the deal goes through there doesn't appear to be much downside risk at these levels (current price: $88.71). I prefer MCD over BKW so I'll likely opt for the cash option or sell into any further strength ($92-94). I'm considering MCD and SBUX as an alternative should the deal eventually go through.


i have been waiting for sbux to drop back a bit and still can't make up my mind about mcd though they are at a more tempting price lately

mickey d's has great real estate, a great breakfast trade, a very efficient and fast ordering process, a great record of dividend raises but their overall non-breakfast menu is stale and type-caste as big mac's and quarter pounders ... that is a big problem ... they need a clearer path to growth, that's what worries me


----------



## Moneytoo

Synergy said:


> I'm considering MCD and SBUX as an alternative should the deal eventually go through.


Cramer suggests Sturbucks and Chipotle: http://realmoney.thestreet.com/articles/08/26/2014/dont-buy-burger-kings-desperation


----------



## sags

One problem McDonalds, Burger King, and the other fast food chains is facing.........is that expanded better quality menus require more preparation time and slow down the service.

The time spent in lineups is continuing to stetch longer, and customers are growing impatient.

Who wants to sit in the drive-thru line at Tim Hortons........while someone orders a bunch of specially prepared sandwiches ?

Express lanes are a way around it........but most stores don't have the room.......and it would require more staff.

Seems that fast food and full service are two conflicting ideas.


----------



## fatcat

sags said:


> One problem McDonald's and the other fast food chains is facing.........is that better quality menus require more preparation time and slow down the service.
> 
> The time spent in lineups up at the take out window is continuing to stetch longer, and customers are growing impatient.
> 
> Who wants to sit in line at Tim Hortons........while someone orders a bunch of specially prepared sandwiches ?
> 
> Express lanes are a way around it........but most stores don't have the room.......and it would require more staff.
> 
> Seems that fast food and full service are conflicting ideas.


yes, good points ... we are evolving our tastebuds and despite the economic times are willing to spend more on better quality food

mcdonalds is killer at moving people through the drive throughs and lines in their restaurants but their hamburgers just don't add up to the kind of quality you get in the increasingly more popular gourmet places both for burgers and breakfast and especially coffee

i still eat a mcdonalds burger but i am a dinosaur i am not the guy you need to sell over the next decade

it is a real problem for these places


----------



## Synergy

Moneytoo said:


> Cramer suggests Sturbucks and Chipotle: http://realmoney.thestreet.com/articles/08/26/2014/dont-buy-burger-kings-desperation


I've had Chipotle on my watch list in the past. Definitely a better performing stock "growth" over the past 5-10 yrs. I don't need the dividend at this point so CMG is an option to look further into - thanks.


----------



## Synergy

fatcat said:


> i have been waiting for sbux to drop back a bit and still can't make up my mind about mcd though they are at a more tempting price lately
> 
> mickey d's has great real estate, a great breakfast trade, a very efficient and fast ordering process, a great record of dividend raises but their overall non-breakfast menu is stale and type-caste as big mac's and quarter pounders ... that is a big problem ... they need a clearer path to growth, that's what worries me


I was tempted to buy SBUX when it dropped to $68 back in April. I've been somewhat holding off on my US purchasing until TD get their act together - US$ RRSP. Transitioning away from holding US stocks in my non-registered account. I here ya about MCD, but if there were "no worries" then the price / valuation would be sky high. Tough space.


----------



## peterk

fatcat said:


> mcdonalds is killer at moving people through the drive throughs and lines in their restaurants but their hamburgers just don't add up to the kind of quality you get in the increasingly more popular gourmet places both for burgers and *breakfast and especially coffee*


I find the MCD breakfast and coffee superior to fast food competitors. Sure they won't be taking the "city WASP" customers away from Starbucks, but they are slaying the likes of Tim's and Dunkin donuts for quality as far as I'm concerned.

I haven't liked THI for the last couple years ever since my 60 year old mother and her ladies group of coffee drinkers abandoned Tim's. Now they go to local private coffee shops or MCD. Same with drive through. MCD is preferred over Tims in my family.

Of course just look at the two stocks over the last year. I suppose I _might_ be wrong... :biggrin:


----------



## jamesbe

McD's breakfast is horrible. Try Harvey's it's a real breakfast with real bacon, real eggs and real toast.


----------



## HaroldCrump

jamesbe said:


> McD's breakfast is horrible. Try Harvey's it's a real breakfast with real bacon, real eggs and real toast.


And McD uses _artificial_ bacon, eggs, and toast?
Made of plastic?


----------



## Synergy

HaroldCrump said:


> And McD uses _artificial_ bacon, eggs, and toast?
> Made of plastic?


You can add plastic / petroleum shakes to the list "sugar infused plastic":biggrin:


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## donald

Was reading the other day(mcd struggling of late)as a bell-weather indicator that consumer spending is while on it's way,it is actually a good sign(bull market)that mcd is struggling of late because the pattern has shown itself with mcd doing really well in true downturns and poor after the tipping point of a stable and growing economy(Notice you don't hear of late the 'higher' prices of cmg or sbux-people have returned to spending and choosing and not 'necessity')
I am struggling though about my mcd holding.........I am tempted about switching to wen(i believe wendy's is superior in quality against mcd and burger king)I don't know.


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## Synergy

Real egg cracking contest!! - MCD
https://www.youtube.com/watch?v=FGB4eDT6TrE


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## fatcat

Synergy said:


> Real egg cracking contest!! - MCD
> https://www.youtube.com/watch?v=FGB4eDT6TrE


the egg cracking video is part of a brilliant (in my opinion) campaign they are running to show people that they use real food 

i don't think their egg breakfast with hash browns and coffee is any worse for you than every other quick food place in town, most restaurants, except the small places where i pay $12 for the same breakfast, are using prepared ingredients ... their coffee is really, really good

i think the rest of the menu is a big problem though, they have tried other kinds of food and nothing seems to stick, their burgers are not considered to be gourmet by a mile, they serve kids food and food that appeals based on how fast you can get it, not on taste (i'd like to try harveys but there are no harveys in victoria for me to try)

personally though i would take mickey d's ahead of every other fast food hamburger place


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## Islenska

Had this stock long time ago and took a small profit but good for those that hung in there

On their food, can't stand it along with all the other fast fooders, (unless you are motoring on a road trip, it's allowed!) each:


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## dotnet_nerd

jamesbe said:


> McD's breakfast is horrible. Try Harvey's it's a real breakfast with real bacon, real eggs and real toast.


My favorite for breakfast, of the fast-food joints, is good old 'amburgers and woot beer' (A&W).

Their burgers are best too.


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## Addy

So, according to CBC, The deal is structured as follows:

3G Capital, the investment firm that owns Burger King, would pay $65.50 in cash for every Tim Hortons share already out there.
In addition to that cash, every Tim Hortons shareholder would get 0.8025 shares in the new, as yet unnamed company.
Shareholders also would have the right to choose an all-cash or all-stock option.

Does anyone have experience with selling stock after the date (what is the date called where they say if you own the stock on this day you get the dividend or in this case, cash and stock in new company) after that date?


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## Synergy

Addy said:


> Does anyone have experience with selling stock after the date (what is the date called where they say if you own the stock on this day you get the dividend or in this case, cash and stock in new company) after that date?


Once everything has been approved I'm assuming a closing date will be announced. At that point, on / after that date it looks like you have 2 options: 1) cash payout of $88.50, or 2) $65.50 in cash, and 0.8025 in new shares (value of apr. $94). There's a lot of uncertainty about the deal, hence why the stock is trading around $87.


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## Synergy

I was surprised to see THI close at $89.22 today. Looks like some investors see value in the deal.


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## swoop_ds

I'm still sitting on my shares that are in an unregistered account with a transfer agent, dripping away.

It seems like the deal is going to go through, and I'll have to decide what to do with my shares.

Is it reasonable to assume that the new company will have a dividend and a DRIP/SPP plan? This will honestly be a big reason for me to sell or stay.


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## marina628

I am hanging on to mine long term ,had the sense to buy 250 shares in march /April .I would sell if they stopped the dividend ,that was the main attraction for me.


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## Synergy

I sold my shares earlier this weak despite having to pay capital gains on the proceeds. The dividend was too low to entice me to stick around any longer and I was able to get out above the cash value being offered. I like Tim's but I'm not sure Burger King is going to do great things for them. To many unknowns.


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## OnlyMyOpinion

Sold my single share yesterday. One?#&?? 
Yes, it had drip'd in, in Sept after selling my full position in late Aug after the announcement. The good folks waived the commission on the sale of my share though.


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## the_apprentice

OnlyMyOpinion said:


> The good folks waived the commission on the sale of my share though.


Hate when that happens. How did you manage to get the fee waived?


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## OnlyMyOpinion

the_apprentice said:


> Hate when that happens. How did you manage to get the fee waived?


Called, explained that I'd sold in late Augst and had been told to call back when 1 drip'd share showed up and they could look after it. I'm told this is fairly common. Like some other fees, I understand they have some flexibility in applying them. I don't know the extent of that flexibility or the differences amongst different brokers though.


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## Synergy

the_apprentice said:


> Hate when that happens. How did you manage to get the fee waived?


Happens to me all the time as well. I simply call TD and they sell the drip'd shares and waive any associated fees.


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## novel

I received and reviewed the information circular for the merger today, but am slightly confused. The record date which entitles shareholders to vote for or against the proposal is November 3, 2014. Say I choose to do neither and sell my shares tomorrow before the vote takes place...that's okay? Am I 'locked in' to one of the two options: all-cash or cash-and-stock? Apologies if that's a stupid question as I haven't dealt with this situation before.


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## kcowan

As long as the shares are trading, you can choose to sell. I did.


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## m3s

Kind of funny Tim Hortons customer vows to give up his Timmies habit forever in scathing email rant

I gave up Timmies years ago. They got me into coffee, and I pretend to still like them when people from other countries bring it up, but nope. Got a thermos and espresso machine and never looking back. Ok ok.. if I'm on the road and everything else is closed I'm still happy to see a Timmies! I doubt he will succeed with his empty threat haha


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## Addy

m3s said:


> Kind of funny Tim Hortons customer vows to give up his Timmies habit forever in scathing email rant


Well this is a crock. 

"Katherine Galley, a spokeswoman for Tim Hortons, responded in an email to the Citizen Friday that the company takes the complaints “seriously.”"

I have only formally complained (through the Tim Horton website) and never once received any reply, nothing. I don't particularly enjoy Tim's coffee, although I do appreciate the increase in their stock price since I purchased it. I'm contemplating selling but it's difficult to do when the price keeps going up and up.


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