.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Dear Mr. Berko:

Dear E.P.:

I’m a Burger King (BKC-$19.40) fan. I think BKC makes the best double cheeseburger, best burger, best fish sandwich, best french fries, best shakes, etc., in hamburger land. I prefer BKC’s junk food to McDonald’s, Wendy’s, Sonic, Steak & Shake and Hardee’s. In fact, I’d drive a mile out of my way to taste all of BKC’s artery busters.

I don’t mind the dirty floors. I don’t use the smelly bathrooms or come in contact with the many surly, slovenly, overweight employees in uniforms two sizes too small and whose offending English is off-putting. I don’t mind the dirty tables, the overflowing trash cans, the drab gray interior, the “early dentist” facade or the unclean kitchens.

I don’t mind those things because I use the drive-through. However, lots of folks are not as forgiving as I am. They won’t take their kids to Burger King. They want well-lit, bright, upbeat locations where they can be comfortable allowing their children to roam the premises. I have four young grandkids, and when I give them a choice of fast-food restaurants, they enthusiastically opt for McDonald’s.

Two of BKC’s biggest problems are its physical plant and its labor force, many of whom are probably rejects from homeless shelters.

Another negative is BKC’s advertising. It doesn’t appeal to my grandkids or their friends. Its irreverent ads on TV focusing on its big-headed king personality may be cool, but my 14-year-old grandson says that they’re “creepy-jeepy.” I’ve no kids at home and seldom watch TV, but my daughter tells me that BKC’s “SpongeBob Square Butts” advertisement featuring the King mascot dancing with women who have “square butts” is distasteful. Now, if my daughter feels that way, then I can assure you that other mothers who form the tribunal of approval also share the same opinion.

My daughter and other mothers have been voting with their feet and walking to McDonald’s or Wendy’s, and Burger King’s revenues have been trending down. BKC should consider changing its advertising agency and pink slip the dipsticks who approved those ads.

The near-term outlook is not sanguine. BKC’s 2010 per-share earnings will probably be about a dime lower than last year’s $1.48, and although its 7.6 percent net profit margin beat the bejabbers out of Hardee’s, Sonic, Papa John’s, Domino’s and Jack in the Box, it pales in comparison with the 19.7 percent net profit margin of McDonald’s. BKC has a book value of $8.65 per share; debt is 44 percent of capital; and its balance sheet is modestly conservative. There are only 137 million shares outstanding, and they barely trade above their 2006 initial public offering price of $15.

I think management will eventually get with the program; however, it may take a few years. I don’t care a whit for BKC today, but I think it’s a better-than-even bet that BKC could be a good long-term buy. So consider placing an open order to buy BKC at $15, and you may be able to sell it at $28 in late 2013.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, Fla. 33775 or e-mail him at mjberko@yahoo.com.. © 2010 Creators.Com