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Lone Pine's Steve Mandel Buys 7% of Dunkin Donuts
Posted by: Holly LaFon (IP Logged)
Date: September 11, 2012 11:38AM

Investor Steve Mandel of hedge fund Lone Pine Capital has acquired a new holding, Dunkin’ Brands Group (DNKN). Dunkin’ Brands is the parent company of Dunkin’ Donuts and Baskin-Robbins. Mandel bought 7,021,945 shares of the company, paying $29 per share on average, according to GuruFocus Real Time Picks. He now owns 7% of the company.

Dunkin Brands Group Inc has a market cap of $3.51 billion; its shares were traded at around $30.56 with a P/E ratio of 25.1 and P/S ratio of 5.6. The dividend yield of Dunkin Brands Group Inc stocks is 2.1%.

Dunkin’ shares have gained 22% year to date. It has been a publicly traded company for a little over a year. In the second quarter, the company opened 140 new restaurants worldwide and grew revenue by 9.8% on increased royalty income from higher sales. Net income increased by $1.3 million year over year due to decreased interest expenses from refinancing and repaying debt with proceeds from its IPO.

For fiscal year 2012, the company expects U.S. comparable store sales to grow 4 to 5%, and Baskin-Robbins U.S. comparable store sales to grow 2 to 4%. It also has plans to add between 260 and 280 net new restaurants and close 40 to 60 Baskin-Robbins U.S. locations.

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Guru Discussed: Steve Mandel: Current Portfolio, Stock Picks
Stocks Discussed: DNKN,
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Re Lone Pine s Steve Mandel Buys 7 of Dunkin Donuts
Posted by: Dr. Paul Price (IP Logged)
Date: September 11, 2012 02:10PM


His buy is pretty surprising considering the early private equity guys have been getting out completely. DNKN looks very overpriced to me.



Guru Discussed: Steve Mandel: Current Portfolio, Stock Picks
Stocks Discussed: DNKN,
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Re Lone Pine s Steve Mandel Buys 7 of Dunkin Donuts
Posted by: vgm (IP Logged)
Date: September 12, 2012 10:23AM

Paul,

According to people like Seth Klarman and Julian Robertson, Steve Mandel is arguably the finest analyst out there. And we know his record is awesome. With all due respect, maybe you should be trying to figure out what he is seeing that you are not. It would be amazing if someone of his caliber is buying something that's actually "very overpriced". And in fact Lone Pine are not the only ones buying DNKN of late.



Guru Discussed: Steve Mandel: Current Portfolio, Stock Picks
Stocks Discussed: DNKN,
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Re Lone Pine s Steve Mandel Buys 7 of Dunkin Donuts
Posted by: Dr. Paul Price (IP Logged)
Date: September 12, 2012 10:47AM

The PE investors that sold out did not do so because they love DNKN's future prospects.
The ACA (Obamacare) could cripple profitability of many franchise operations starting in 2013.

Margins in these businesses are small to start. $2,000 penalties or mandatory health coverage (at the ACA's dictated coverage levels) may be near a death blow to more than a few chains.

At best, margins will suffer. At worst they will cease to be profitable unless they can increase prices signficantly.

It's a bad group to play with until the effects of Obamacare are fully digested.




Guru Discussed: Steve Mandel: Current Portfolio, Stock Picks
Stocks Discussed: DNKN,
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Re Lone Pine s Steve Mandel Buys 7 of Dunkin Donuts
Posted by: vgm (IP Logged)
Date: May 28, 2013 03:38AM

Looking like another good call by Mandel - as expected.



Guru Discussed: Steve Mandel: Current Portfolio, Stock Picks
Stocks Discussed: DNKN,
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