Forum Archive Index - September 2000

["Day Trader" <daytrader105@hotmail.com>]

RBD certainly does seem to be undervalued and I would suggest that this will 
be the case for a long while. Of course the market will have its ups and 
downs but recent trend lines suggest that this share is trading well below 
par. I recall that at the last AGM that both CEO and Chairman tried to 
explain the undervaluation of the share price. I even recall something about 
a bonus for their key staff if they acheived a suitable increase in returns 
for their shareholders in terms of share price.

The shareprice in my opinion will remain undervalued for the following 
reasons:

The annual same shop sales is only increasing due to the fact that Starbucks 
is expeiencing high and growing sales. This concerns me after their unusual 
change in prices which would lead me to believe that they had their pricing 
structure wrong in the first place.

The fact that Starbucks has lost more than 80% of the management team (incl 
store managers that started in the first 15 months of the brand coming to 
NZ.)

The resignation of the Starbucks general manager, and the Pizza Hut general 
manger both within the last 6 months.

The fact that many of the KFCs are financially supporting the unprofitable 
Starbucks and Pizza Huts.

The fact that Pizza Hut is now purchasing back market share that it lost to 
a better operator.

I for one would like to hear CEO of Restaurant Brands answer a few of these 
questions. Ben, what do you think?


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