Investopedia: History Suggests Street Will Get Over "Disappointing" Smucker Results

I don't want to spend too much time defending Smucker's (NYSE:SJM) fiscal first quarter results, as I thought they were fine. Still, the Street is likely to be concerned about the pace of growth in K-Cups and the question of whether the company can maintain its significant share in the retail coffee business against the likes of Kraft (Nasdaq:KRFT), Green Mountain (Nasdaq:GMCR), and Starbucks (Nasdaq:SBUX). To the extent that history is any indication, I expect Smucker shares will be fine, though the valuation has gotten a bit steep in a still-expensive packaged food sector.

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Investopedia: Starbucks Shows Why It's Starbucks

Alright, Will Ashworth, you win this round! One quarter ago, fellow Investopedia writer Will Ashworth took issue with me seeing limited appreciation potential in Starbucks (Nasdaq:SBUX) and laid out a case that Starbucks was still a good buy. With the stock up about 22% over the last quarter, blowing away other restaurants like McDonald's (NYSE: MCD) and other consumer stocks in general, there's little else for me to do but see where I got Starbucks so wrong and reevaluated where it can go from here.

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Investopedia: Better Margins Are Nice, But Are Green Mountain Investors Too Excited About The Starbucks Deal?

For better or worse, Green Mountain Coffee Roasters (Nasdaq:GMCR) is never a boring stock to watch. Caught in a tug-of-war between bulls and bears (the stock is up more than 100% over the past year, but over one third of the float is shorted), earnings reports always get more than their fair share of attention. This time around, the company made some respectable progress on margins, but investors may be getting a little too excited about the long-term implications of a new Starbucks (Nasdaq:SBUX) deal and a little too casual about unimpressive revenue growth trends.

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Investopedia: Starbucks' Special Model Is Valuable, But Maybe Not This Valuable

Normally talking about “liquid meals” is something reserved for college students, but the reality is that Starbucks (Nasdaq:SBUX) has long since proven that there's room in the quick service restaurant (QSR) for something other than burgers and sandwiches. Starbucks has likewise capitalized on the brand value it built through its stores by establishing a significant retail/commercial presence that few restaurants come close to matching.

I don't want to make the mistake of underestimating what Starbucks can become. There's still ample room for store expansion in much of the world, not to mention additional products in the retail channel and follow-on markets like teas and pastries.

The only question I have is what this is all worth. On one hand, Starbucks doesn't seem priced all that out of line with successful QSR operators like McDonald's (NYSE:MCD), Chipotle (NYSE:CMG), or Dunkin' (Nasdaq:DNKN), nor successful packaged food and beverage companies like Coca-Cola (NYSE:KO), Mondelez (Nasdaq:MDLZ), and Nestle (OTC:NSRGY). On the other hand, investors have to either expect strong high-teens free cash flow (FCF) growth for at least another decade or accept relatively unimpressive expected annual returns for today's valuation to make a lot of sense.

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Seeking Alpha: Arcos Dorados Somewhere Between Gold And Scrap Iron

For the most part, investors can't seem to get enough of Brazilian consumer stocks, bidding many of them up to exceptionally demanding valuations. And to be fair, many of these companies are producing pretty solid growth numbers. In the case of Arcos Dorados (ARCO), though, a combination of sluggish comp-store growth, rampant cost inflation, and fears of competition seem to be combining to create a stock that many investors are pretty ambivalent about today. While it is important that investors not understate the risks to the Arcos business model, I think these shares could be an interesting speculative play at these levels.

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Arcos Dorados Somewhere Between Gold And Scrap Iron

Investopedia: Yum! Brands Still Has Indigestion, But Investors Have An Opportunity

Yum! Brands (NYSE:YUM) has stumbled into a perfect storm in China. Concerns about contaminated chicken at what is still a relatively expensive dining option have sent Chinese same-store sales plunging, robbing the company of its primary growth driver. The company has reset expectations significantly lower for 2013, and now the question is just how quickly (and perhaps "if") the company can put this stumble behind it. In the meantime, investors are looking at the nearest thing to a bargain in the shares as they are likely to see.

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Investopedia: Big Valuation/Small Miss Wrong Combo For The Fresh Market

What's going on in the wake of the third-quarter earnings report from The Fresh Market (Nasdaq:TFM) will be altogether familiar for veteran investors. Here we have a great growth company, perhaps one of the best growth plays today on the mass-affluent customer category, but with a stock that carried nosebleed valuations. Q3 earnings showed a hiccup in store traffic and margin leverage, and the stock got pummeled. Although I still like the growth story at The Fresh Market just fine (as well as the stores themselves), I'm still a long way from liking the stock.

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Investopedia: Green Mountain Coffee Roasters Gives The Street A Jolt

Apparently reports of the demise of Green Mountain Coffee Roasters (Nasdaq:GMCR) have been at least a little exaggerated. While the market pioneer for single-serve coffee brewing has some formidable challenges coming from increased competition, it's worth remembering that the consumer products market is not like the prescription drug market where generic launches immediately drive prices into the cellar. That said, it's not as though Green Mountain's valuation marks this out as an especially cheap stock today.

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Financial Edge: The Risky Business Of Courting LGBT Customers

Whether it's due to the rise of social media and the phenomenon of the immediate sharing of views and opinions or just an intensification of the "culture wars" that seem to occur everywhere throughout history, where we eat and shop now has more political and social overtones than ever before. In particular, companies are finding that they must be very careful in how they attempt to position themselves towards Lesbian, Gay, Bisexual and Transgendered (LGBT) customers.

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Investopedia: The Market Seems To Have Shifted From Blind Love To Blind Fear With VeriFone

The stock market is a funny place sometimes; one where you may just find yourself defending a stock you used to criticize pointedly. And yet, that's where I feel I am with VeriFone (NYSE:PAY). I didn't like this stock much back in the "what, me worry?" go-go momentum days and I'm glad I didn't actually short it, as the stock just kept climbing from 2009 to 2011. Now it's a different story. Investors have raised questions about how the company reports organic growth and everybody seems to be getting on board the mobile payments bandwagon. Although VeriFone still carries pretty robust fundamental valuation ratios every value investor looks at, this is a company that looks well-placed for ongoing growth. The question for investors now, though, is whether the company can please a momentum crowd that no longer seems willing to give the company much benefit of the doubt.

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Investopedia: Bull Vs. Bear - The Mobile Payment Revolution Is Coming

Question: Will mobile payments become America's most popular transaction method in the near future?

Bull's Response
While mobile payment systems have been a hot topic for years now, they are finally becoming more real. Although there have been systems available for a while now (including the small dongles that could be used to quickly pay for gasoline at some stations), companies are now trying to find that right mix of hardware and software that will allow them to penetrate the huge North American retail and service space.

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Investopedia: Mind The Moving Parts At Yum!

Taken as a whole, Yum! Brands (NYSE:YUM) is still an exceptional global restaurant concept. You could argue that the company has "out-McDonald's (NYSE:MCD)" McDonald's, with its exceptional success and excellent growth platforms in Southeast Asia, Latin America and the Middle East. All of that said, Yum! Brands has long carried a premium valuation due to that Chinese growth kicker and while the company is likely to continue to be quite successful, valuation may be an issue with the shares.

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Investopedia: Panera Well Off The Value Menu

The restaurant world is increasingly looking like a winner-takes-all market, as nationwide quick service restaurants (QSR) batter locally-owned rivals on price and marketing and the top QSR chains further separate themselves from their rivals. As one of the "Big Three," Panera Bread (Nasdaq:PNRA) is not only seeing strong store traffic growth, but excellent overall profitability.

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Seeking Alpha: McDonald's Looks Vulnerable To Indigestion

The trouble with great businesses is that they give investors so few chances to buy in at discounts to fair value, and that's the problem with McDonald's (MCD) today. While there's no reason to think that the company's share gains or excellent margins will abate, the Street already has baked in exceptional performance for many years to come. Even with this restaurant's consistent record of surpassing expectations, it looks like a bad setup for new investors.

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McDonald's Looks Vulnerable To Indigestion

Investopedia: Arcos Dorados Feels The Squeeze

After a big bounce early in 2012, investors are taking a step back and realizing that conditions in the emerging markets may not be as bad as feared, but they're not as good as hoped. As a direct play on consumer spending in Latin America and Brazil, Arcos Dorados (Nasdaq:ARCO) shows a lot of that push-pull dynamic. Although underlying growth is OK and growth potential is significant, investors have gotten spooked by slower sales growth and greater cost impacts than originally feared.

Squeezed at the End of the Year 

Arcos Dorados had a challenging fourth quarter that came in a little short of initial expectations. Revenue rose more than 10% as reported (about 16% in constant currency), on a better than 11% same-store sales growth number.

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Investopedia: Dunkin' Brands Definitely A Hot Cup Of Coffee

Quick service restaurants (QSRs) are hot today, but the stock of Dunkin' Brands (Nasdaq:DNKN) hasn't enjoyed as much of that love. While owners of McDonald's (NYSE:MCD), Yum! Brands (NYSE:YUM), Panera (Nasdaq:PNRA) and Starbucks (Nasdaq:SBUX) have all racked up double-digit gains over the past year, Dunkin' has been an under-performer.

The trouble for Dunkin' stock right now seems to be the trade-off between quality and value. There are a lot of things to like about the business model at Dunkin' Brands, but working off a demanding valuation may keep a lid on outperformance for a little while yet.

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Investopedia: Yum! Brands Gives Its Skeptics Indigestion

Looking back, maybe it's not so hard to see why quick-service restaurants would do well in a tougher economy, but the performance of the top brands has been nothing less than blistering. In the case of Yum! Brands (NYSE:Yum), the story continues to be all about China. With Yum! still set on turning China into a fast food nation, it would be dangerous to assume that the company's remarkable growth is due to slow anytime soon. (For related reading, see Investing In China.) 


Q4 Earnings Trade a Little Margin for Growth
There was no question that Yum! Brands saw fine growth in the fourth quarter. Total revenue rose 15%, with reported U.S. revenue down a little (though up in the mid-single digits on an adjusted basis), International up about 7% and China up a torrid 39%. Not surprisingly, same-store sales show a similar breakout - China's same-store sales growth was an eye-popping 21%, while International growth was much more modest (up 3%) and U.S. results were fairly soft (up 1%).

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Seeking Alpha: Arcos Dorados - When Quality Meets Scarcity

Investors who want to play the significant improvement in the quality of life and buying power of consumers in Latin America are not exactly spoiled for choice. With regulatory burdens and costs making U.S. listings increasingly seem like more bother than they're worth, there is only a scant handful of direct consumer plays for the region.
That scarcity value alone would make Arcos Dorados (ARCO) interesting. But given that this large McDonald's (MCD) franchisee also happens to be delivering very solid growth as well, it is worth a look from investors looking to play the emerging consumer trend in Latin America.

Slinging a Lot More Burgers South of the Border
Arcos Dorados saw revenue jump nearly 29% on a reported basis for the second quarter, or nearly 19% on a constant currency basis. Same-store sales chipped in 15% growth, as the company continues to benefit from traffic and ticket growth across its operating geography.

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Arcos Dorados: When Quality Meets Scarcity

Investopedia: McDonalds Continues To Reinvent

McDonald's (NYSE:MCD) is a curious story. It runs only one concept worldwide, but it runs it extremely well. What's more, though it has a fairly limited menu and a relentless focus on driving out costs, it is seeing growth and operating leverage by expanding that menu and finding even more ways to become even more efficient. It is also an interesting contrast to Yum! Brands (NYSE:YUM) as the companies seem to be following very different playbooks at this point in their corporate lives. 

Great Second Quarter Performance 

If McDonald's is the place where people go to eat when they cannot afford better options, that may explain why results were so strong in the second quarter. Unlike Yum! Brands, McDonald's actually saw good same-store sales growth in both the U.S. (up 4.5%) and Europe (up 5.9%), while Asia-Pacific and emerging markets were more modest (up 5.2%) relative to the much higher economic growth in those areas. 

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McDonald's Continues To Reinvent (MCD, YUM, RT, RRGB, WEN)

Investopedia: Is The U.S. Holding Back Yum! Brands?

The list of American companies that have done a better job than Yum! Brands (NYSE:YUM) of growing their brands and business in China is a short one indeed. In fact, YUM has been so successful in its international growth that it is now worth wondering if the U.S. business is still capable of being part of the company's future growth plans, or whether there might be some sort of "value-unlocking" transaction in the company's future. 

Second Quarter Results Tell a Story  
Overall, YUM reported that sales rose more than 9% in the second quarter, surpassing the average estimate by more than $100 million, but not quite beating the highest estimates in the range. There are no two ways about it - China was the story here. U.S. same store sales fell 4% as Taco Bell and KFC were both weak, but Chinese same-store sales shot up 18% on 21% higher store traffic. The company's other foreign operations were a more moderate grower, with 2% same-store growth. 


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