After reading some comments on the temporary investment on the web, I began to wonder questions about my vision of the thing.
Basically, my question was why I dislike the fact that MTY Food has 25% of his business in cash, but a company like Westjet does not bother me (it has 28% cash).
I quickly realized that it's my gut feeling who initially said no to MTY but YES to WJA. I learned to listen to my inner voice in 2008 ... because I have always advised before my mistakes during Q2 and Q4 2008 (of course I had not heard). In short, it was my lesson of the day: Never go against how I feel now ( if you do not like, Then do not touch ).
To answer my question, I had still something more concrete. And I found today: my confidence in management. Let me explain: For
Westjet, I have confidence in the future of the enterprise and project management. I know there are nearly 45 new aircraft to be delivered over the next 5 years and the company management intends to see Westjet among the largest airlines in the world by 2016. To survive in the industry, it is common knowledge that should also hold about 10% in cash. By comparison, WJA has a cash position far too great, but I'm comfortable with. I know what are the intentions of the company (or rather the direction) with that money.
Conversely, I do not know what it means to MTY Food with its funds. I am unable to see what are the objectives of MTY. I know they are already leaders in fast food food court. But what are the objectives of management? How do they intend to spend this money? Where do they make acquisitions? In
Alimentation Couche-Tard, I know that the goal of management is to improve its position in the U.S., to shop south of the border to acquire companies competitors. But MTY? do they want to develop a new niche in Quebec? Expand their exposure in the rest of Canada? From the American adventure? Moving to Europe?? I do not know.
I'm not comfortable investing in a company where I do not know what direction the research and holds a significant amount of cash on hand. I'm not saying it is a sure failure. I'm just saying that this is a new venture to add into the equation (the uncertainty of management objectives) that I do not wish to take. Some may take love, I am me. After
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