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Blog: 7 February 2017 (Taste vs Famous Brands)
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In today's blog we take a look at two of South Africa's most well known fast food/ casual dining shares listed on the JSE. One is the gaint that is Famous Brands (FBR), the other the lesser known competitor that is looking to follow a similar business model to Famous Brands, known as Taste (TAS). We will take a look at their share performance over the last year as well as some of their best known brands.
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Famous Brands (The giant)
From the candlestick chart it is clear that FBR has not exactly been shooting the lights out in the recent past. We not to surprised by this as our own valuation on FBR placed the company at roughly R150 per share. And with retailers (food and clothing) and restaurant groups taking serious strain on the market in recent months we are not surpised by the fact that FBR has basically been moving sideways for the last year. However the smaller lesser known competitor (with big dreams) Taste has really been struggling . We take a look at TAS's candlestick chart below.
From TAS's candlestick chart it is clear that it has been having a lot tougher time on the market than the more established FBR. Even though both are trading in similar sectors and the fact that TAS has two major international brands in it's stable (both Domino's Pizza and Starbucks). The question investors would be asking is if the sell off in TAS compared to FBR is justified or not. And if its deemed to not be justified then surely TAS presents a better buying opportunity than that of that of FBR as it has lost more ground in the prior 12months than FBR.
TAS has incurred massive capital outlays to convert Scooters Pizza to Domino's Pizza and to open a large number of Starbucks stores. And only time will tell whether the capital outlays for these two international brands will pay dividends for TAS or not.
In future we will be doing similar comparisons of related share in the same way.
Share price performance since January 2016:
FBR: - 10.8%
TAS: -38.9%
TAS has incurred massive capital outlays to convert Scooters Pizza to Domino's Pizza and to open a large number of Starbucks stores. And only time will tell whether the capital outlays for these two international brands will pay dividends for TAS or not.
In future we will be doing similar comparisons of related share in the same way.
Share price performance since January 2016:
FBR: - 10.8%
TAS: -38.9%