4-Star Stocks Poised to Pop: Arcos Dorados
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Arcos Dorados Holdings (NYS: ARCO) has earned a respected four-star ranking. The company operates McDonald's (NYS: MCD) franchises in South America.
With that in mind, let's take a closer look at Arcos Dorados' business and see what CAPS investors are saying about the stock right now.
Arcos Dorados facts
|Headquarters (Founded)||Buenos Aires, Argentina (2007)|
|Market Cap||$4.56 billion|
|Trailing-12-Month Revenue||$3.57 billion|
|Management||Chairman/CEO Woods Staton|
CFO German Lemonnier
|Trailing-12-Month Operating Margin||6.3%|
|Cash/Debt||$251.1 million / $544.8 million|
|Competitors||Yum! Brands (NYS: YUM)|
Sources: S&P Capital IQ and Motley Fool CAPS.
This past summer, Clint35 succinctly summed up the opportunity: "Very similar to buying [McDonald's] except this one is cheaper and has more growth ahead of it."
Over the next five years, in fact, Arcos Dorados is expected to grow its bottom line at a brisk rate of 21% annually. That's faster than other restaurant stocks like Yum! Brands (13%) and Starbucks (NAS: SBUX) (17%).
CAPS member danablanca elaborates on the Arcos Dorados bull case:
I love McDonald's. ... Smart, still cheap food for the kids, premium choices for adults = more profit. Also now have free Internet. I believe their system of delivery remains unsurpassed and this is the opportunity to access the company at a reduced entry point. [Arcos Dorados] being the largest franchisee only based in Latin America. I have not yet made the real money leap however would consider it around the $20 mark.
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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Arcos Dorados, McDonald's, Starbucks, and Yum! Brands. The Fool owns shares of Starbucks and Yum! Brands. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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