Brazil Fast Food Corp.: A Smallcap To Help Satisfy Your BRIC Craving

Seeking Alpha:

Brazil Fast Food Corp. (BOBS.OB) is a holding of mine that I purchased back at about $2.40 and recently trimmed my position in half to let it ride. I like the long-term prospects of the stock, but am looking to try and accumulate on further weakness in emerging markets stocks.

Brazil Fast Food Corp. does what it sounds it does. They operate and franchise the 2nd largest chain of fast food storefronts and stands in Brazil (behind McDonald’s) with over 450 locations, and growing at a good clip. About 60 are company owned, but the remainder are franchised. Though the majority of revenue (~80%), it accounts for only 33% of profits. The real segment of interest is the franchising division, which although it only accounting for about ~15% of sales, accounts for a whopping 66% of operating income. This division is also growing at about 40%, and has the benefit of insulating BOBS from commodity prices and other economic hiccups (they primarily collect franchise fees and royalty revenue). More.