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One country is about to take its place as a major global energy source, overshadowing Saudi Arabia. Sadly, it's not America. This country has one trillion barrels of oil, and they're not shy about extracting it or selling it. This country is about to move into economic-superstar status. I know six companies in superb position for a huge profit surge – triple-digit gains and double-digit yields. Details here.
| | | 9/03/2014 By Chad Fraser 
By now you've likely heard that Burger King (NYSE: BKW) is buying Canada's Tim Hortons Inc. (NYSE: THI, TSX: THI).
The C$12.5-billion ($1 Canadian = $0.92 U.S.) cash-and-stock deal will result in a fast-food juggernaut with 18,000 restaurants in 100 countries. In all, they'll boast US$23 billion of annual sales.
The new firm will be the world's third-largest fast-food company, behind McDonald's Corp. (NYSE: MCD) and Yum! Brands (NYSE: YUM).
Under the deal, Tim Hortons shareholders will receive C$65.50 in cash plus 0.8025 of a share in the new company for each Tim Hortons stock they hold. They can also elect to receive $88.50 in cash or 3.0879 shares of the new firm, subject to proration.
U.S. and Canadian regulators, as well as Tim Hortons shareholders, still have to sign off on the deal, which is expected to close in early 2015.
Assuming it goes through in its current form, Brazilian investment firm 3G Capital, which holds a 70% stake in Burger King, will own 51% of the new company. Current Burger King shareholders would own 27%, and Tim Hortons investors would own the remaining 22%.
Tim's shares have jumped nearly 30% on the New York Stock Exchange since August 22, the day before news of the talks broke. Burger King is up more than 24%.
That spike has set up ...
A Winning Buy Call for Our Canadian Edge Subscribers
One group that has benefited from this situation is readers of our Canadian Edge advisory.
To see why, we have to go back a little less than seven months to February 7, when Canadian Edge chief strategist David Dittman issued a buy call on Tim Hortons after the stock had a weak start to the year (we cover Tim Hortons in our How They Rate Universe, which keeps 150 Canadian companies under continuous review).
"The iconic Canada-based coffee-and-doughnut retailer has sold off by nearly 9% in Canadian dollar terms and 13% in U.S. dollar terms thus far in 2014, and it looks like solid value at these levels," wrote Dittman.
If you'd followed his advice then, you'd be sitting on a 58.2% gain today (not including dividends).
(Dittman has just rushed out a new free report that reveals four more Canadian stocks he expects to deliver strong gains in the months ahead. Read on to learn how to get your copy now.)
Four Key Takeaways From Burger King's Big Buy
Here are four more surprising facts about the deal: - Tim owns the Canadian coffee business: The Canadian quick-service restaurant market is hotly competitive, but the company has still managed to build what Warren Buffett calls an economic moat, due to its well-known brand, lucrative franchise network (it owns the land and buildings and rents them to franchisees) and high market share: according to research firm NPD Group, nearly eight out of every 10 cups of coffee sold in the Great White North come from Tim's stores.
The chain has 3,610 locations in Canada, 870 in the U.S. and 44 in the Middle East. However, its future hinges on growing beyond its home base, especially in the U.S., where it's still a small player (the 43rd-biggest chain by sales in 2012, according to QSR magazine).
Teaming up with Burger King should help Tim Hortons jolt its international growth. And Tim's gives BK a key asset for taking on McDonald's, Starbucks (NYSE: SBUX) and Dunkin Brands Group (NasdaqGS: DNKN) in the US$30-billion fast-food breakfast market. - Buffett sees value in Canada: Speaking of Buffett, Berkshire Hathaway (NYSE: BRK.A) has committed US$3 billion of preferred equity financing to support the deal.
This is Berkshire's third significant Canadian investment in the past year. Last summer, Buffett made headlines north of the border when he snapped up a US$500-million stake in oil sands pioneer Suncor Energy (NYSE: SU, TSX: SU)---another Canadian Edge pick.
More recently, in early May, Berkshire announcedthat it would buy Calgary-based electricity transmission firm AltaLink for C$3.2 billion from Canadian engineering company SNC-Lavalin Group (TSX: SNC, OTC: SNCAF). - Overseas growth is key to tax savings: As part of the deal, the new parent company will be based in Canada, though Tim Hortons and Burger King will maintain their current headquarters in Ontario and Florida, respectively.
The move has been compared to other so-called "tax-inversion" deals, where U.S. firms buy smaller companies abroad and relocate their head offices to escape higher U.S. corporate tax rates. Canada's rate is around 26%, according to the OECD, compared to about 39% in the U.S.
However, Burger King's overall effective tax rate was 27.5% in 2013, compared to 26.8% for Tim Hortons, according to both companies' annual reports. But notably, Canada doesn't generally tax income generated by foreign subsidiaries if it has a treaty with the country in which they pay taxes, while the U.S. does.
Buffett, for his part, has defended the shift as a move to assuage Canadians' concerns about losing control of an iconic brand:
"Tim Hortons earns more money than Burger King does," he said in an August 26 Financial Times article. "I just don't know how the Canadians would feel about Tim Hortons moving to Florida. The main thing here is to keep the Canadians happy." - There is an argument for a Canadian home base: The new company will do a lot of business north of the border: on a combined basis, 60% of the new firm's revenue came from Tim Hortons' Canadian outlets in 2013, followed by Burger King's U.S. and Canadian outlets (16%), according to figures from Bloomberg. However, the U.S. was the largest market by number of locations, with 44%, compared to 21% in Canada.
Profit From a New Economic Superpower
Have you ever wondered what it would be like to invest in the birth of a new economic superstar---like post-war Japan when it transformed into the world's second-biggest economy?
Well, you're in luck.
Because Canada, backed by 1.7 trillion barrels of oil---40 times more than the Bakken!---is about to claim the top spot as the world's major energy source.
Already, Canadian stocks routinely reward investors with triple-digit gains and yields topping 10%---and the profits haven't even begun to reflect the boom to come.
Canadian investing expert David Dittman has just released 4 Canadian picks that demand your attention if you hope to pile up profits in the next decade. What's more, these screaming buys are perfectly suited to U.S. investors.
We're ready to send you everything you need to know in his just-released special report, "How to Build Your Own Profit Pipeline." It's absolutely free to anyone who samples Canadian Edge.
Don't miss out on this once-in-70-years opportunity. You have nothing to lose---and much to gain---by taking a look.
Click here to grab your free copy now. | | |
While Obama dithers over the Keystone pipeline… over the exporting of natural gas… over U.S. production of our own "evil" oil and gas resources, our economy stays paralyzed.
Up north, Canada's prime minister shares none of Obama's agonies. Mr. Harper's too busy selling his country's abundant energy to the rest of the world – for an incredible profit.
Warren Buffett's in. He just invested a half-billion in the Canadian company that opened up the Alberta oil sands. Maybe it's the rich double-digit yields that attracted Buffett, or the potential for triple-digit gains that he likes.
We have six more companies about to surge on Canada's energy boom. Don't dither like Obama. Take advantage of this amazing profit opportunity now. Click here.
| | | 9/03/2014 By Jim Pearce 
I'll wager that most US investors' portfolios comprise at least 80% US stocks, if not 100%. Yet time and again we've found some of the best returns and highest yields on the other side of our northern border. We've studied and invested in the Canadian market for decades. That's why ten years ago Investing Daily launched Canadian Edge. It's the only US-based financial advisory focused solely on arguably the world's strongest economy. Today we're sharing an article with you straight from the July issue of Canadian Edge. It's a small example of the massive amount of analysis offered to paying subscribers. We think, after you read the article, you'll understand why close to 5,000 investors regularly depend on Canadian Edge to provide them every month with informative content and advice on high-yielding blue-chips and even higher-yielding income trusts. Click here now to examine the sample. If you find Canadian Edge can add value to your portfolio, we would enjoy having you join the growing ranks of satisfied customers. This is not a sales pitch. We are proud of our editorial staff and feel confident you'll enjoy the article. | | |
China, Australia, Japan, Thailand, South Korea and the EU nations want to throw cash at this emerging economic superpower. The time to invest is now. The profits haven't even begun to reflect the boom to come. Go here.
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