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Veladero mine: Barrick expects better production in 2014
In 2014, Barrick Gold Corporation expects production to range between 650 and 700 thousand ounces. The higher estimate is based on an expected volume recovery and higher ore grades from two pits.
Food cost is one of the important operating costs for a restaurant. High inflation in the food cost can cause the restaurant’s operating margins to tighten.
The Expected Business Conditions Index is part of the Expectations Index. It measures restaurant operators’ outlook towards business conditions over the next six months.
As of August 2014, the restaurant industry’s capital expenditure was at 101.8. It has been at levels above 100 for the past five consecutive months.
Same-store sales are one of the most important revenue drivers for a restaurant. Same-store sales help determine the growth in sales from the existing location.
The Current Situations Index is based on indicators’ past trends—same-store sales, traffic, capital expenditure, and labor. It has been at levels above 100 since March 2014.
In August, the Restaurant Performance Index increased to 101.9. It has been over 100—or in an expansion period—since March 2013.
Increased confidence leads to an increase in spending. As of September 2014, the Conference Board Consumer Confidence Index (or CCI) was at 86.
CPI and PCEPI measure inflation. Inflation is a change in the price of a basket of goods and services. However, CPI uses a fixed-base basket of goods and services.
The savings rate is the amount expressed as a percentage of disposable income that hasn’t been spent by a consumer.
With an increase in average hourly earnings and personal income, consumers will also increase their spending. This includes spending on discretionary items.
A downturn leads to a slowdown in customer spending. As a result, businesses experience a drop in sales. Businesses have a hard time maintaining a high staff level.
The restaurant industry is a part of the Consumer Discretionary sector. This sector does well when the economy is expanding. It doesn’t do well when the economy is contracting.
The EV to EBITDAR multiple is used in businesses where there’s significant rental and lease expenses—hotels and airlines. We’ve used this to analyze Marriott’s valuation.
Marriott’s shares closed at $64.58 on October 9, 2014. This was an ~32% increase from the beginning of the year. Its stock price was $48.96 at the beginning of the year.
Marriott (MAR) expects a revenue per available room (or RevPAR) growth of 4%–6% between 2014 and 2017. The revenue growth will be driven by a 10%–12% CAGR in fee income.
Marriott plans to invest $2.5–$2.7 billion between 2014 and 2017. It will mainly invest on capital expenditure, at 41%, and contract acquisition costs, at 34%.
As of June 30, 2014, Marriott had 215,000 rooms under pipeline. 38% of the rooms are under construction. This is in line with the industry trend.
Marriott (MAR) has been able to expand its business through investments. Investments have allowed it to enter new markets and market segments.
Marriott increased its fee income at a ten-year compound annual growth rate (or CAGR) of 7.6% to $1,543 million in 2013—from $742 million in 2003.