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A & W Food Services of Canada Inc T.AW

Alternate Symbol(s):  AWFDF



TSX:AW - Post by User

Comment by CSIFailon Apr 29, 2019 12:55pm
53 Views
Post# 29684030

RE:New highs with very rational and strong volume. I've seen

RE:New highs with very rational and strong volume. I've seen Interesting perspective. I think $50+ is a definite possibility. This stock is closely held. It's clear shareholders are extremely patient and happy to collect their dividend indefinitely and enjoy the continued growth. Taking that into account, what current price would it take to entice shareholders to sell the company? I can envision approximately 8-10 years worth of dividend would ought to do it which puts a potential acquision value around $60.

If SSSG + dividend increases exceeds inflation buying this stock is a no brainer. It's like a bond with underyling growth possibility and a potential take-out value far exceeding current share price.

Downside risk is a major recision or shift in consumer eating patterns that negatively affects the business. Ideally management can mitigate these risk with careful menu planning, expansion plans, marketting, novel ideals, niche targetting. Note that it's a lot more difficult for a major chain like McD to execute and attempt niche plays due to their operational size. A&W has a distinct advantage here (for instance, meatless burgers). They can adapt to the market situation as required.

TL:DR - this is a great buy-and-hold stock for current dividends, dividend increases, potential acquision and strong underlying business and growth prospects.





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