Research Report ►(comments)

Tim Hortons Inc. is a fast food restaurant chain in Canada. It offers a range of consumer goods such as, premium coffee, flavored cappuccinos, specialty teas, home-style soups, fresh sandwiches and fresh baked goods.

Investment Impacts (help)

Canada Country Analysis ► (edit / improve) Canada (CAD) has a capitalist, service-based, economy and is one of the wealthiest countries in the world. The services and materials industry are the two main employers. Currency: the Canadian dollar has the potential to decrease in value especially if export markets for materials do not perform well. Investor Survey: the economic environment is very favorable for long term economic growth due to high scores on economic freedom and SWOT strengths. Trade: China, UK, Japan, Mexico and the US are Canada’s top trading partners, while the leading exports are energy and materials. Commodity: Canada has the capacity to produce a significant amount of crude oil. Other commodities include Uranium, lumber, zinc, and nickel. SWOT Analysis: The Leading Canadian strengths include Canada’s free trade policy, oil reserves, and universal health system. Trading Strategy: An overvalued currency and low investment flow potential are negatives, while the favorable business environment is a significant positive. Canada’s potential is neutral.

Coffee Commodity Analysis ► (edit / improve) Coffee is a brewed beverage derived from the coffee plant beans. It is one of the most popular drinks in the world. Commodity: Coffee is rated a Buy. Coffee demanders have an average potential to increase in value, while coffee suppliers have low potential to increase in value. Investor Survey: Coffee’s long term growth potential is average due to high scores on SWOT opportunities, but low scores on lack of good substitute commodities. SWOT Analysis: Strength: Coffee is one of the most popular beverages in the world; Weakness: the cost of producing coffee increased. Opportunity to grow: coffee’s widespread use could aid growth as the world’s population increases; Threats to growth: plant disease may compete against coffee. Trading Strategy: The commodity analysis buy rating indicates that coffee should increase in price over the short term, whereas an average investor survey means coffee may stay the same in price over the long term.

Discretionary Industry Analysis ► (edit / improve)

Description: The consumer discretionary stocks include companies whose sales come from consumer discretionary income purchases. Discretionary income = gross income less taxes and necessities such as rent, mortgage and food. Read More.

Profit Analysis: The best way to profit from discretionary stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street on left side), and have high Main Street Common Sense investment ratings (see Main Street on right side). When an economic recovery occurs, discretionary stocks tend to outperform the general stock market, because consumers quickly resume spending on items they wanted, but resisted buying during tougher economic times. Eventually those investments become overvalued, because profits and stock prices increase past their fair values. In other words, the margin of safety becomes low or negative. During the last stages of an economic business cycle, just before a recession, it is best to sell discretionary stocks, because they are likely to decrease in price the fastest. Selling a stock investment is difficult to do properly. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. As a general rule, the larger the investment potential (margin of safety), the safer the investment.

Trading Strategy: During economic recessions, consumers tend to cut back on discretionary expenses to save money. Less spending by consumers eventually decreases business revenue and stock prices. During economic recoveries, consumers have more discretionary income, so spending quickly increases. Higher spending increases business revenue and eventually increases stock prices. During long economic expansions, discretionary income increase, but at a slower pace than during the initial economic recovery stage.

¹ Investment potential (margin of safety) is a weighted average of the discounted cash flow (DCF), the enterprise value (EV) market multiple, and the Warren Buffett investment methods.
² The weighted average cost of capital (WACC) for the industry is a broad representation of the WACC for each individual company. A sub-industry WACC offers both stability and accuracy for each individual company.

SWOT Analysis - Tim Hortons ► Add Your Input Below

WACC Discount Rate Analysis - Tim Hortons ► Experiment with THI's Analysis ►

Discounted Cash Flow Analysis - Tim Hortons ► Experiment with THI's Analysis ►

Comparative Value Multiple Analysis - Tim Hortons ► Experiment with THI's Analysis ►

Warren Buffett Intrinsic Value Analysis - Tim Hortons ► Experiment with THI's Analysis ►

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