Forum Archive Index - March 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Bill

> 
>McEwen has just posted an article on http//www.shareinfo.co.nz. His
>advice is to SELL.
> 

I've read the article.  Nothing really new here.  McEwen says KFC is 
in trouble with sales down and the fact that the fried style of food 
is no longer is fashion.   Has McEwan only just noticed?  KFC 
changed their name from 'Kentucky Fried Chicken' to 'KFC' for just 
that reason umpteen years ago.  I'd say part of the reason that KFC 
sales are down is that  stores are being closed for a week for 
refurbishment on a rolling basis, coupled with a reduction in the 
discounting promotions.   Both of these factors should be positive 
for profits in the medium term.

Starbucks seems to have a kind of saturation strategy, at least in 
the bigger centres.   I think it is a bit early to say whether this 
is the wrong approach.

As for Dominos Pizza, they aren't planning to enter the state of 
Victoria for a while, nor are they in New Zealand at all yet.

McEwen seems concerned that all of the RBD brands are not growing all 
of the time so the share should be sold.  I would say that at current 
price levels the share is priced for zero growth in sales (which 
means a fall in market share if the overall market grows), so any 
growth that does happen will be 'for free' with RBD priced around 
$1.35.

I notice McKewen doesn't state what price he believes fair value for 
RBD is.  I think he's just being trendy (in the chartists sense of 
the word).   Can't see any reason to sell RBD at these prices.  Why 
halve your income from this capital by putting your RBD money in the 
bank?

SNOOPY



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