We Made an Exception for Tim’s

Article Excerpt

TIM HORTONS INC. $31 (Toronto symbol THI; SI Rating: Extra risk) recently sold shares to the public at $27.00 each. We usually advise against buying initial public offerings, since all too many fizzle in their first few years on the market. But we made an exception for Tim’s. Its parent company, Wendy’s International Inc., sold part of Tim Hortons to the public to establish a liquid market, prior to handing out the remaining stock to its own investors. That gives Wendy’s an incentive to prepare things so that Tim Hortons does well in the next few years. Tim Hortons now has 2,600 outlets and 23% of the Canadian fast-food market (in comparison, McDonald’s has only 18% of the Canadian market). Tim Hortons also has 300 U.S. outlets. It has struggled lately in the U.S. due to competition from larger, more established chains, such as Dunkin’ Donuts with 4,400 stores. But Tim Hortons plans to open 200 more stores in the U.S….

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