Highlighted Charts
U.S.: Pan American Silver Corp ( PAAS ), Jefferies Financial ( JEF ), Borg Warner ( BWA ), Fomento ( FMX ), Enbridge Energy ( EEP ), Umpqua Holdings ( UMPQ ), Mckesson ( MCK ), Jack In The Box ( JACK ), Sothebys ( BID ),Benchmark Electronics ( BHE ), Varonis Systems Inc ( VRNS )
Developed: Solvay ( SOL.BE; SOLB BB ), Umicore ( UMI.BE; UMI BB ), Daimler ( DAIX.DE; DAI GR ),Husqvarna ( HUSQB:SS; HUSB.SE ), Inter Pipeline Fund ( IPL.CA; IPL CN ), British Land ( BLND.GB; BLND LN ), Santen Pharmaceutical ( XY@N.JP; 4536 JP ), Rocket Internet ( RKETX.DE; RKET GR ), Restaurant Brands ( QSR.CA; QSR CN ), NextDC ( NXT.AU; NXT AU ), Constellation Software ( CSU.CA; CSU:CN )
Emerging: ACC Limited ( ASC.IN; ACC IN ), LG Electronics ( 066570:KS; JHD.KR ), Kasikornbank ( TFBF.TH; KBANK/F TB ), Pegatron ( PEG.TW; 4938 TT )
Stocks worth focusing on in this week’s Global Laggards:
Developed
Restaurant Brands International ( QSR.CA ) – Retail ( $14B market cap ) – franchises and operates 25K quick service restaurants including Tim Hortons ( 17K ), Burger King ( 5K ), and Popeye’s ( 3K ).
Commentary
Shares of QSR.CA are 16% off 52-week highs and finding resistance at the downward sloping 10- and 40-WMA. RS Rating 54. A/D Rating C. Price support is at $70, followed by $68 then $65.
The stock has an EPS Rank of 99, but it is expected to slip as EPS growth is expected to moderate to 5% and 6% for 2018 and 2019, respectively.
For Q3 2018, the Company’s Burger King ( BK ) segment contributed to 41% of Q3 EBITDA while Tim Hortons ( TH ) and Popeyes ( PLK ) made up 52% and 7%, respectively. Comparable sales trends for BK have been a cause for concern, decelerating to 1.8% in Q2 2018 (from 3.9% in Q2 2017) and 1.0% in Q3 2018 (from 3.6% in Q3 2017).
The weak performance at BK has resulted in the Company’s revenue growth decelerating to 1.0% y/y in Q2 from 7.1% in Q1. For Q3, revenue declined 2.2% y/y.
While management is in the process of developing a new “Burger King for Tomorrow” store model to close the design gap versus McDonald’s outlets, the ensuing capex burden on franchisees could lead to unit closures.
