Bob’s Your Uncle

"Idea of the Month" pushed off to next week, but here's a quick update

By Travis Johnson, Stock Gumshoe, August 16, 2013

Normally I’d be sharing the “Idea of the Month” with you right about now, but I’m not really sold on any of the ideas I’ve been considering so I’m going to put it off a week and let the thoughts percolate. And as it so happens, our resident pooch here on Gumshoe Mountain went off and got himself quilled in the face by a porcupine … so I spent the afternoon at the Vet tending to a very sad puppy (he’s fine now, thanks … hopefully he’ll surprise us and learn from the experience), which means today’s new note will be blessedly brief.

There’s still plenty to read here at Stock Gumshoe, of course — we just published Myron Martin’s latest piece looking at some teensy weensy stocks and some mining and tech ideas, so you can see that special report for the Irregulars here. And I did share a couple notes earlier in the week, about selling Sprott Resource Corp (SCP.TO, SCPZF) and buying Third Point Reinsurance (TPRE), so you might want to check those out if you want to spend a few more moments inside my head. Not that this is necessarily a good idea.

And finally, one of our longtime holdings and one that I wrote about for the Irregulars a few years back reported earnings recently, and continues to buck the somewhat negative trend of Brazilian stocks, putting out solid growth numbers. Here are my quick thoughts on that report:

Brazil Fast Food (BOBS) continues to grow. I continue to worry about Brazil in terms of political unrest, labor costs, competition from global brands (McDonald’s/Arcos Dorados and Burger King competing against Bob’s), and the value of the Brazilian currency, but they continue to revamp, sell more franchises for their own brands (Yoggis and Bob’s), and do very well with their franchised outlets for KFC and Pizza Hut. The first half of the year showed continued sales and income growth, and continued growth of outlets to keep ramping up the nice franchise income and reduce the volatility and risk of their owned and operated Bob’s stores, and they also enjoyed excellent growth from their KFC outlets in particular.

You can see the quarterly release here if you’re interested. When you translate the currency, the first six months of 2013 brought in 59 cents per share in earnings, which is earnings growth of better than 40% (for ...

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