Sometimes stocks fall on news that most long-term investors wouldn’t deem as material. These instances can be annoying to some investors, but they should be seen as opportunities to buy more of a good thing at a cheaper price. In a way, it’s a gift courtesy of Mr. Market, who doesn’t always make rational decisions.
In the case of Restaurant Brands International (TSX: QSR)(NYSE: QSR), a stellar company that’s been firing on all cylinders, the stock pulled back from its all-time high thanks in part to news that 3G Capital, the managers running the show, will sell $3 billion worth of shares.
Insider selling happens all the time, and it doesn’t necessarily mean that insiders expect that something ominous will happen anytime soon.
At the time of writing, the stock is down about 5% from its all-time high. While it’s never a bad idea to take profits off the table, I think now would be a terrible time to follow in 3G’s footsteps.
Restaurant Brands stock still has ample upside because of a vast number of catalysts ranging from innovative new menu items (meatless meat burgers and sought-after chicken sandwiches) to ambitious expansions into new markets like Tim Hortons and Popeyes with the aim of increasing store count aggressively in China.
Moreover, it seems to make sense that 3G Capital would be more willing to raise some cash after its Kraft Heinz investment soured, with shares collapsing over 70% after 3G’s cost cuts sliced deep into the flesh of the condiments maker that can’t seem to form any sort of bottom.
There’s no question that 3G is going to need to Kraft up some kind of miracle to get Kraft Heinz back in the right direction. It’s not too late for the company, but analysts seem to believe that it will be an uphill battle.
Whether the QSR stock sale has anything to do with Kraft Heinz is anybody’s guess, but it shouldn’t matter to investors.
Restaurant Brands is showing no signs of slowing down. In fact, the company has never looked better, with Popeyes making headlines with its successful (and now sold-out) chicken sandwich, as it looks to expand its footprint into the promising Chinese market, with over 1,500 stores planned to be opened over the next 10 years.
The fast-food juggernaut has an arsenal that could win the chicken, coffee & doughnut, and burger wars. With a capital-light international expansion underway, I wouldn’t pull the brakes on the name just yet. I’d buy more as Mr. Market slaps a discount on the name over news that shouldn’t be as relevant to longer-term thinkers.
Stay hungry. Stay Foolish.
