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Tiger Global Management exits position in Burger King Worldwide

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Feb. 26 2015, Updated 11:05 a.m. ET

Tiger Global Management and Burger King Worldwide

Tiger Global Management added new positions in Alibaba Group Holdings (BABA) and Pilgrim’s Pride (PPC). The fund increased its positions in Autohome (ATHM) and Avis Budget Group (CAR), and decreased its positions in Visa (V) and Hertz Global Holdings (HTZ). In addition, the fund sold off its position in Burger King (BKW) and Priceline Group (PCLN).

The hedge fund has sold shares worth over $220 million in Burger King, which represented 2.93% of the fund’s total portfolio in the third quarter. The main competitor of BKW is McDonald’s (MCD), which has a 0.49% exposure to the SPDR S&P 500 ETF (SPY). The ETF tracks the overall performance of 500 publicly traded companies in the growth sector.

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Overview of Burger King Worldwide

Burger King Worldwide is a global chain of fast food restaurants founded in 1953 with headquarters in Florida. The company is part of Restaurant Brands International, one of the world’s largest quick service restaurant companies with more than $23 billion in system sales and over 19,000 restaurants in nearly 100 countries.

Analysis of Burger King’s competitors

The above chart shows Burger King’s closest competitors. The average price-to-earnings (or PE) ratio for the above peers for the next 12 months is 24.3x, compared to the PE ratio of 28.4x for the last 12 months.

The average return of most of the players above is higher than the S&P Index, with the exception of McDonald’s (MCD), Yum! Brands (YUM), and Wendy’s (WEN) at 0.5%, -1.7%, and -3.2%, respectively.

Burger King Worldwide acquires Tim Hortons

In December 2014, BKW acquired Tim Hortons after approval by the shareholders of the latter company for an estimated $11.4 billion. The new company, which will operate over 18,000 units with estimated worldwide sales of $23 billion, will be named Restaurant Brands International and trade on the New York Stock Exchange and Toronto Stock Exchange under the ticker symbol “QSR”. Restaurant Brands International will become the third largest restaurant operator in the world, following McDonald’s and Yum! Brands.

Burger King CEO Daniel Schwartz stated, “We are excited to unveil the name of our new global company, which conveys our mission to create the world’s leading global restaurant business through a strong commitment to our franchisees and a consistent focus on serving guests around the world.”

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