We have been nibbling at the market but until we get clarity about the Fed’s intention on interest rate policy at their meeting next week, we don’t want to enter into any large trades. We bought LOCO a couple of weeks ago because they announced share buybacks and a special dividend of $1.5 and at the time, LOCO was trading around $10 which meant a 10% return but we also understand that the demographics across America are changing and started to consider whether LOCO could become the next McDonalds or Starbucks.
We ran across this article on Yahoo Finance which reports just how large the Latino purchasing demographic has become over the time.
The U.S. Latino population is a lucrative demographic group. In fact, if it was its own country, the U.S. Latino cohort would have the fifth-largest economy in the world, according to the 2022 LDC U.S. Latino GDP Report from the Latino Donor Collaborative.
Finance Yahoo
And the potential doesn’t stop there, it has become clear that the United States is in a demographic crisis and something needs to be done. The US Labor Secretary warns of a ‘catastrophe’ if something isn’t done:
But Walsh said that immigration reform, supported by every business owner he talks to, will be critical to the national workforce and without it, a ‘bigger catastrophe’ than a recession or inflation is coming….
“One party is showing pictures of the border and meanwhile if you talk to businesses that support those congressional folks, they’re saying we need immigration reform,” Walsh said. “Every place I’ve gone in the country and talked to every major business, every small business, every single one of them is saying we need immigration reform. We need comprehensive immigration reform. They want to create a pathway for citizenship into our country, and they want to create better pathways for visas in our country.”
CNBC.COM
Pollo Loco is largely located in California and parts of the southwest but Starbucks began as a small coffee shop in Seattle in 1971. Will Pollo Loco be the next Starbucks or McDonalds? Who knows but the demographic and economic trends support the possibility. We’ll take our chances with a small position and check back in in 10 years. Stay tuned and stay solvent…