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TACO - Del Taco Restaurants, Inc.

Discussion in 'Stock Message Boards NYSE, NASDAQ, AMEX' started by bigbear0083, Oct 17, 2016.

  1. bigbear0083

    bigbear0083 Content Manager
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    [​IMG]

    Del Taco Restaurants, Inc. develops, franchises, owns, and operates Del Taco quick-service Mexican-American restaurants in the United States. The company's restaurants offer Mexican inspired and American classic dishes. As of September 22, 2016, it operated approximately 550 restaurants in 16 states. The company was founded in 1964 and is headquartered in Lake Forest, California.
     
  2. bigbear0083

    bigbear0083 Content Manager
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    Hitting new highs here heading into ER after the bell today:
    [​IMG]
     
  3. T0rm3nted

    T0rm3nted Moderator
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    Reported after close today (10/17/16)
    Earnings: EPS $0.13 Revenue $104.4M
    Estimates: EPS $0.12 Revenue $101.61M

    Up 8.87% after hours
     
    bigbear0083 likes this.
  4. StockJock-e

    StockJock-e Brew Master
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    Del Taco shares jump after earnings beat, guidance raised

    Del Taco Restaurants Inc. TACO, +8.23% shares are up 8.9% in Tuesday premarket trading after the company announced third-quarter earnings that beat earnings and sales expectations. The Mexican fast-food chain said late Monday it had net income of $4.9 million, or 13 cents per share, compared with a loss of $2.2 million, or 6 cents per share, during the same period last year. Sales for the quarter totaled $104.4 million, up from $82.0 million last year, and exceeding the FactSet consensus of $102.0 million. Same-restaurant sales system-wide grew 6.7% while company-operated same-restaurant sales were up 7.1%. For fiscal year 2016, Del Taco now expects revenue between $446 million and $449 million, up from the previous forecast between $439 million and $449 million. Earnings per share are expected to be 53 cents to 56 cents, and same-restaurant sales are expected to grow in the 2.5% to 4.5% range. Del Taco shares are up 18.6% for the year so far while the S&P 500 Index SPX, +0.57% is up 4% for the same period.
     
  5. StockJock-e

    StockJock-e Brew Master
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    I like companies that have ticker symbols that are easy to remember!

    We should start a mutual fund of these! :D
     
  6. Tiptopptrader

    Tiptopptrader Well-Known Member

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  7. T0rm3nted

    T0rm3nted Moderator
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    Analyst Upgrade/Downgrade Update

    Brokerage firm:
    Wedbush
    Change: Coverage Reiterated/Price Target Changed
    Previous Rating: N/A
    Current Rating: Outperform
    Previous Price Target: $15
    Current Price Target: $17
     
  8. MarkITRight

    MarkITRight Member

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    Bought some TACO earlier today (currently $6.23)

    Technically looking for the bounce off the 50MA
    Fundamentally really like their drive-through model in this environment and love the food (much better version of Taco Bell)

    They recently added more Beyond Meat items and fresh guac so good mix of value meals and premium possibilities which should increase margins.


    Looking for $7.5 as first exit (20% profit)
     
    #8 MarkITRight, Jul 8, 2020
    Last edited: Jul 8, 2020
    T0rm3nted likes this.
  9. MarkITRight

    MarkITRight Member

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    Wild day! Del taco was up nearly 10% on no news in the middle of the day.
    Then the epic market turnaround happened, but it still ended the day up 3.47%

    California announced re-closing of indoor dining late today which I think will be positive for Del Taco as its 90% drive through and California is their biggest market.

    Spent a lot of time searching reviews of their newest locations in new markets and all are positive, they averages about a 4/5 which is great for fast food. Any recurring bad issues were blamed on individual service or minor meal mistakes which happen with high volume fast food. I'm hearing about long lines from my friends in the West Coast and am still excited about Del. Love their food but none around me. If the chart stays positive we could see a golden cross setup right right around earnings release on July 23rd.
     
  10. A55

    A55 Active Member

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    Screenshot_20200713-193058.png
    Just because Governator Newsom announced today that indoor dining is closed, that will not create a wave of business for Del Taco. Indoor dining has been closed for months in my area, for the last 5 months, so nothing changed.

    Realistically, that does nothing to increase Del Taco customer base. I can buy food to go from my favorite restaurant, or any restaurant. Just because I can't sit in the dining room of any restaurant, it doesn't mean the masses will gravitate towards a Del Taco drive through.

    In the old days, some people used to say, "like the product, and like the stock".

    I don't like the product. I can't like the product. They don't have a location in my area. Which demonstrates their lack of market share. California has several large metropolitan areas which house a majority of the population. San Diego, Los Angeles, San Francisco, Sacramento. I'm in San Francisco...... Stop Laughing! No Del Taco in The City.

    In order for Del Taco to grow, they have to be in all the major markets. Look into it and see if they have a growth plan and if it has been set back by Corona virus. Who are their competitors? Are they #1 ahead of Taco Bell? How do they compare to other fast food like McDonald's, Jack in the Box, Kentucky Fried Chicken, Burger King?

    Food as a business has nothing to do with perception of food quality. So we can't reasonable gauge opinion. How many people want Taco Bell, as opposed to a taqueria burrito? Is Taco Bell good? Is Del Taco good? I don't like Taco Bell food. But Taco Bell is profitable. Half of the shopping mall food court isn't good, but profitable.

    Andrew Zimmern once said something about most of America eating Panda Express not knowing that it's not real Chinese food. He actually called them horseshit restaurants. I think that applies to most corporate dining and suburban mall food courts. The business of food and the metrics for profit never factor in serving a good meal.
     
    #10 A55, Jul 13, 2020
    Last edited: Jul 13, 2020
  11. MarkITRight

    MarkITRight Member

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    I hear you, I actually lived in many Del Taco areas and know the product, grew up around it, and everyone thinks it stands at a much higher quality level than taco bell. They are ~9% the size of Taco Bell based on number of locations but have a great brand in established areas. They actually have a good franchise site and I'm watching it and the news to see their expansion vs planned expansion http://www.deltacofranchise.com/development

    Their average check size is actually really good at $8+ is great for fast food. They had 12-10% margins which recently dipped to slightly under 10% and was a secondary tailwind for the selloff after last ER. They are addressing this with more beyond meat products, fresh guac addition etc which should restore margins.

    Places I'm looking in my research include online reviews in new markets to gauge possibility of that franchisee and others growing. Restauranteurs look at reviews to see how the new market is receiving the brand and product and 4+ star reviews are great for fast food.

    I also how many consumers save them as favorites on Postmates vs competitors in established markets, and so far I've seen similar or better number of Postmates favorite saves for Del vs Taco Bell but haven't completed my analysis yet.

    It's the number 2 QSR mexican fast food franchise and still has only 596 locations compared to 5,604 Taco Bells. I've seen lots of acquisitions happen in this space with good brands in recent years. Not many restaurants will remain in the future. Rubio's, Popeyes, Habit Burger to name a few that I can think of off the top of my head that were acquired in the past few years. Not many established public brands (at reasonable valuations), and this is definitely a turnaround story because management is not executing as well as they should be but is fundamentally a great restaurant brand. Lots of rumors of Del being acquired in the past, not trying to substantiate them but I could see it happening based on valuation. 0.5x sales, 4.4x cashflow for a 90% drive through brand in a covid world..

    Peakstone Group does a good yearly QSR M&A review.
    https://peakstonegroup.com/wp-content/uploads/2019/09/Restaurant-2019-09.pdf

    Also watching their google search trends and they're consistently trending up for Del Taco since bottoming out at the end of March... Also checking franchise news and seeing that their franchisees are moving forward in California and other states. Haven't built out my entire model yet. As you mentioned I'm Peter Lynching this one for now and going with the "like the product like the stock" theory. That and the resurgence of drive through theme in the covid environment. But will do more in-depth research when I have time and see if it makes it from a trade to a longer term investment.

    Cheers and happy trading.
     
    #11 MarkITRight, Jul 13, 2020
    Last edited: Jul 13, 2020
  12. A55

    A55 Active Member

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    You can make more opening a Del Taco franchise.

    it will be a working asset which you control. You can drive up sales by spinning a sign on the corner. It produces tacos you can eat. There's a profit margin on each taco. There's backend money selling recyclable materials. Then flip the restaurant location to someone else as a turnkey opportunity.

    Warren Buffett said if you buy land, you can farm it, you get the crop yield, let someone else farm and take a percentage, then still sell it. You can buy cows. You have milk, meat, leather, manure. Then they continually reproduce themselves and you get it free after the 1st.
     
  13. MarkITRight

    MarkITRight Member

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    Lol, man I'm just trying to make money trading stocks I don't want to open a tacqueria. But you are right I did look up their franchising costs and thought about it for a few minutes haha. Also Buffet's never milked anything except for a low stock valuation lol.

    In stock related news Wedbush just raised Del Taco's price target to $9.75 and reiterated outperform rating today.
    Looks good technically, up in the premarket to $6.56 and hoping it breaks the 200MA today.
     
    T0rm3nted likes this.
  14. MarkITRight

    MarkITRight Member

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    Great quarter yesterday after the close!

    I listen to the call and management and analysts were excited.

    They’re launching crispy chicken (next week!) and will be the only Mexican qsr to have crispy chicken tacos and burritos. I love their chicken soft tacos (before they were fried) and think this could be huge. Their new marketing director is doing great things.

    They also partnered with ALL major delivery apps this quarter and increased their delivery premium to keep margins up. They’re very affordable either way. Margins (a concern last qtr) are up again.

    Wedbush raises price target to $11 on the back of same store sales increasing again.

    Golden cross setup, uptrend confirmed.
     
  15. A55

    A55 Active Member

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    I think more people are excited about investing in the stock; than there are people excited about eating the food.
     
    TomB16 likes this.
  16. MarkITRight

    MarkITRight Member

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    I think you haven’t read a single review of a Del Taco restaurant.

    Don’t think until you’ve done some research. Compare avg restaurant reviews of Del tacos vs other fast food restaurants.

    Have a nice weekend and see you at $9 levels everyone.
     
  17. A55

    A55 Active Member

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    Screenshot_20200802-002856_kindlephoto-966487405.png Screenshot_20200729-003632.png Screenshot_20200729-003452.png Screenshot_20200802-002301_kindlephoto-966171977.png Screenshot_20200802-002329_kindlephoto-966127905.png
     
  18. MarkITRight

    MarkITRight Member

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