MTY Food Group is a collection of fast food franchises. A large part of its growth has come from buying second-rate and third-rate food franchises. MTY is a very good operator as purchased concepts have generally become much more profitable and have grown into much larger franchises since being bought. The company’s CEO and founder, Stanley Ma, has been referred to as “the king of the food courts”.
Return on equity: around 22.75%. (The company has virtually no debt.)
Growth in book value from 1996 to 2012: 21.5%/year.
Growth in share price from 2003 to today: Over 100X. (Yes, over one hundred times!)
*Disclosure: Long 1 share as a tracking position.
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