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March 28, 2006
How Americans are making Tim Hortons their own, Mon., Mar. 27, 2006, 12:22 PM
I'd like to be able to say that the Tim Hortons' stock (NYSE: THI) is in good hands, but from where some people sit, it's almost criminal. Here you have a case of shameless exploitation of Canada's number one marketing brand, and arguably its best managed company, and I have to ask, "Why?"
Isn't the answer simple? It's pure greed " pump and dump -- by Wall Street bankers. This has not gone unnoticed by ROBTV's Kevin O'Leary, who received a larger than expected IPO allocation, he says. Apparently, he proceeded to dump his cheap IPO stock onto the open market, claiming "too much market overhang".
But he knew that long before he ordered the IPO stock.
One of my friends of about 25 years, John Kinsey, a portfolio manager at Caldwell Securities, is quoted in one of the linked articles (below) as saying he believes most of the stock will return to Canada, where the Company is a cultural icon. It is not a stretch to take his remarks as indicating that Canadian traders are over-paying, and the beneficiaries are those who were lucky enough to be on the underwriters' preferred client list.
One of my readers (a Canadian investment analyst) is quite upset over the pump and dump by Wall Street and their friends in Big Media.
"Bill, Having read the Wendy's background and seeing the hype on THI, I am not surprised to read the (expletive deleted) I have attached in the link:
The fact is that the insiders and sell-side institutions got their initial distribution at C$27 (US$23.16). The market then opened to the public at about C$37, ending the first day at C$33.10. The stock is now down to about C$31 (~26.50). Nobody has made a dime by buying THI on the open market, plain and simple. It has been in a virtual freefall since the moment it began public trading.
So the truth is that after actual market TRADING, the stock is down huge, and likely to continue in a death spiral until the shorting programs get it to where it looks more reasonable for a cover;.. I suspect C$23 (~US$20), or lower.
I put this down to the holders of the IPO running short-sell programs against their retail pigeons who have been pitched the stock over the past 90 days. The financial media continues to present THI as a winner at these inflated prices and this is more than disgraceful. It's criminal.
(Regarding Barron's) I can't believe that people actually pay to buy financial reporting that is so skewed and far from the realities of the markets they claim to be reporting on.
Here's another link to outrageous media "reporting".
I guess this is the American way of taking somebody's icon and making it their own. For money, of course.
Well, I wouldn't even look at THI until the open market priced it in the low 20's (Cdn) " and even then it would be for a speculative bounce and not a long-term hold."
Let's look at the stock trading in Tim Horton's since its Friday morning IPO on the NYSE.
The comparative index (in blue for THI), would put the Dow down to about 9,375 as opposed to the 11,245 it presently is. That's quite a tumble in two and a half days.
I'm not as fired up about this situation as perhaps I should be. I have come to expect it.
In this case, I have to agree that it was a "pump and dump", and there is a lot more stock for Wendy's to distribute. So, while I frequent Tim Horton's stores as much as the average Canadian, and I love them too, I'm going to avoid the stock.
Posted by Posted by Bill Cara on March 28, 2006 12:22:46 PM | Category: Cara Today in the Market
Discourse
BL, Tim Hortons is an excellent company, no doubt. But there is a huge difference between a company and a company's stock. What I was saying is that I agree with those who believe that Wall Street cranked up the volume in order to blow out stock at unsustainable levels. The valuation is too high, and the selling (and shorting) pressure too great for me to want o be in the stock. So, I'll just be satisfied for now by going to the Tim Horton stores, where you can count on the quality and value of their products. The Company intends to expand in the U.S. nearby the Cdn border, which is a wise strategy. To go head up against Starbucks at this point would be a disaster. But in Canada, I do agree that Starbucks can't hold Tim Horton's jockstrap.
Posted by: Bill Cara ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
March 28, 2006 2:07 PM [link]
Bill,
It is the American way, "do them before they do us". From the top of our administration to Corporate America who controls the politics, everything is done in the name of money. Doing what is right for the good of society was something that has gone away to a bygone era.
If we are all going to play this investment game, we have to figure out how to profit from the shenanigans, all too often it will be at the expense of Ma and Pa bagholder.
I feel your frustration and I am one of the THI bagholders myself, though a small position. I have a number of Canadian friends who love the place and I was convinced it would be a great long term hold. Now, I'm just looking for an exit point or some glimmer of hope that it will be a hold.
Look at other stocks that get manipulated like CME. With a 34 million shares float this thing will move 10-15 point in a day on less than 300K in volume. Sure it is a high priced stock, but a free market would have it moving much less. Watch it on your advfn.com monitor and look at he difference between the buys and sells. Even when there is twice as much selling as buying going on, it will move up 5-10 points on that limited volume.
It's all pump and dump, it's up to us to figure out which way stocks will get hyped or manipulated.
Keep up the great work...
Ah, rats, I am one of the dolts who got fleeced. Not all that bad, for I didn'ty buy too much and bailed quickly. The more I trade, the less this happens. Like Lumbar in Buffalo, however,I have seen Tim Hortons open store after store here in Rochester, and, Peter Lynch-like, I bought what I knew without enough checking of the particulars. When the price is right, though, this will be one great stock.
Posted by: carriertom at
March 28, 2006 2:52 PM [link]
This Is How I Saved Thousands on Tim Hortons
--------------------------------------------
Tim's lost its appeal somewhere in the underwriting stages and I could tell there was a problem when the following happened:
1) It's in my elevator - Tim's IPO
2) It's on the 6:00 evening news
3) It's on MAD Money
4) It's in the Free Papers on the transit
5) It's the top symbol pre-ipo on yahoo finance
6) My firm (undisclosed) sends me a new issue
statement but of course getting the IPO was
close to impossible
7) People who never trade ask how is Tim's?
8) The radio has the morning news stating bids
are as high as $60 per share
I won't go any further but there are a few more that come to mind.
My experience came into play and I left it there.
The only part of Tim's I did buy was a Maple Pecan Danish.
From this Tim's scenario, it seems as though there is greed embedded in our genetic code. Thank the Lord there are no call options on Tim's as they'd be worthless for the most part.
Tim's should trade below IPO for consideration.
Cheers
/D
Posted by: dinov at
March 28, 2006 3:35 PM [link]
3/28/2006 15:47 - Tim Hortons Inc.- [THI] Filing:
ANDERSON KERRII B (Vice President) Checked: Director Officer
Common Stock 03/24/2006 P 12,000 $23.16
3/28/2006 15:44 - Tim Hortons Inc.- [THI] Filing:
LAUER DAVID P Checked: Director
Common Stock 03/24/2006 P 10,000 $23.16
3/28/2006 15:42 - Tim Hortons Inc.- [THI] Filing:
PICKETT JAMES V Checked: Director
Common Stock 03/24/2006 P 12,000 $23.16
3/28/2006 15:38 - Tim Hortons Inc.- [THI] Filing:
Devine Cynthia J (EVP/CFO) Checked: Director Officer
Common Stock 03/24/2006 P 38,000 $23.16
long THI
Posted by: stockman at
March 28, 2006 3:50 PM [link]
THI-
As more form 4's have since been reported, I assume everyone has access to reuters or some resource to get these?
This is a small position for me, purchased as the first form 4's hit the wire before the close. 1/3 of a full long. My experience has been that with broad insider participation on initial or secondaries the stocks trade well (all other things being equal) for an intermediate term period following the event. If we get it down to the IPO price or less I would look to take the position to a higher level provided no negative news flow has justified the sell down.
Posted by: stockman at
March 28, 2006 4:47 PM [link]
stockman - I saw that too on THI although my info for insiders is current only as of 03/24 for actual purchases, but if the intent of the purchase was for a dump?
GCI seems to meet some of your criteria and is starting to look good to me, but again, it is a matter of bias that interferes with action on it.
Got any?
BTW, would it be all right with you if Bill gives me your email?
Posted by: spot at
March 29, 2006 9:39 AM [link]
spot-
yes, BILL OK to give email to spot... reduce OT post.
It would surprise me to see reports of massive dumping by these same insiders next week... but if I did, I'd dump my shares pronto- whether at a loss or gain... 100%.
TIM HORTONS INC- [THI] History
ANDERSON KERRII B OD 03/24/06 12,000 $23.16 12,000 $ 277,944
CLANACHAN DAVID F VP 03/24/06 38,000 $23.16 67,100 $ 880,156
DEVINE CYNTHIA J CF 03/24/06 38,000 $23.16 38,000 $ 880,156
HOUSE PAUL D CE 03/24/06 123,000 $23.16 123,000 $ 2,848,926
IACOBUCCI FRANK D 03/24/06 10,000 $23.16 10,000 $ 231,620
LAUER DAVID P D 03/24/06 10,000 $23.16 10,000 $ 231,620
LEES DAVID HARVARD D 03/24/06 5,000 $23.16 5,000 $ 115,810
MOIR WILLIAM A VP 03/24/06 38,000 $23.16 38,000 $ 880,156
PICKETT JAMES V D 03/24/06 12,000 $23.16 12,000 $ 277,944
SCHROEDER DONALD B VP 03/24/06 38,100 $ 23.16- 31.95 38,100 $ 883,351
SCHUESSLER JOHN T CB 03/24/06 12,000 $23.16 12,000 $ 277,944
WALTON ROLAND M VP 03/24/06 38,000 $23.16 38,000 $ 880,156
GCI- This is my kind of monthly chart. And these are small but I like this type of accumulation:
03/20/06 BOCCARDI LOUIS D Purchased 1,000 $58.69 58,685.00
03/13/06 MCFARLAND DUNCAN M Purchased 2,000 $61.83 123,653.00
11/07/05 JASKE JOHN B Sold 5,000 $65.81 329,039.00
10/21/05 MCFARLAND DUNCAN M Purchased 3,000 $63.00 189,000.00
10/12/05 MCFARLAND DUNCAN M Purchased 2,000 $64.75 129,500.00
05/04/05 BOCCARDI LOUIS D Purchased 1,000 $76.70 76,700.00
04/13/05 MCFARLAND DUNCAN M Purchased 2,000 $79.46 158,915.00
Problem is I've had a negative experience with these old media stocks and have developed a bit of a bias against them. For me I'd have to see a more sizable commitment from insiders and/or a break of that nasty downtrend to venture here. Thanks for the idea though, I hadn't looked at these in a while. (My preference is for small cap ideas of this same ilk- that's what has been working for me the most ytd.
Posted by: stockman at
March 29, 2006 9:59 AM [link]
spot-
another large cap that fits the monthly chart mold is CAG; with larger inside bottom fish (CEO) taking a bigger bite I stepped in before break of downtrend.
long CAG
Posted by: stockman at
March 29, 2006 10:08 AM [link]
stockman - Thanks. Sometimes, bias is a sound gut feeling (and sometimes it isn't), but in any case, here is the article that got me looking at media stocks with a definite FWIW.
Posted by: spot at
March 29, 2006 10:47 AM [link]
Re: Insider Trader Transactions
I did not find the transactions on Reuters but I did find this site:
Posted by: davidtr4 at
March 29, 2006 6:41 PM [link]
Why is everybody so sure that Tim Hortons is a bad long term play? As a Buffalonian making frequent trips to Canada it is pretty obvious that the Canadien market is saturated. I remember counting 14 (or something like that) Tim Hortons on the way to a hockey game from our hotel several years ago. However, Tim Hortons seems to me at least, to be one of Canadas great contributions to our continent. Others being Hockey and Michael J. Fox? Thanks!! Seriously though, in Buffalo alone the Tim Hortons are popping up all over the place. Three years ago there were only a couple and now there are 4 within a 15 minute drive of my home. Lets face it, when it comes to breakfast Dunkin Donuts or Mcdonalds and company cant hold Tim Hortons Jock Strap. They just do everything better. Americans dont seem to understand that its not just another Krispy Kreme. In fact I dont think I ever got a donut there after dozens of visits. If Tim Hortons wanted to infilitrate the US I dont see how Dunkin Donuts or Krispy Kreme could keep them out. Hell, we couldnt even keep out Celine Dione and trust me...I tried. Thats just my take.
Posted by: Bill Lumbar![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
March 28, 2006 1:55 PM [link]