Monday, May 17, 2010

A & W Restaurants

Invest in what you know.  So sayeth Warren Buffett.  In that vein, A and W Restaurants keep impressing me.  Not because their fast food recently rated #'s 79 to 86 on a list of 88 trans-fat fast foods, not because they hire Phillipinos who are pleasant, clean and cheerful, and not because they are scrupulous about getting rid of poor franchisees.  Actually it's because of all those things, but what impresses me most is their market penetration.  There is not a one-horse hick town in Canada I've seen that doesn't have a recently-constructed Albert and Walter's.  And their 50's nostalgia theme may be lame to GenXers but to an increasing demographic (baby boomers, to wit) it probably is subconsciously comfy.  As a top-ranked income trust, AW.UN.T has some re-structuring to do before 2011 but it is highly profitable and should continue to yield well thereafter.  Finally, it's a recession-resistant business; when steak and seafood become out of reach there's always the A&W Burger Family.  (I once knew a fellow whose last name was Burger ... hmm, may be there's a freebie in there somewhere.)  As always, you didn't hear it from me, and do your own diligence.  This is not a recommendation to invest, just to try a different burger and root beer float.