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Compiling comments that experts make about stocks while on public TV.

2016-10-26

Opinion for Grande West Transportation Group (BUS-X)

Signal Price Bias Subject Owned
TOP PICK $0.940 UNKNOWN CANADIAN Yes

Basically a baby New Flyer. They make a smaller version of the transit bus, with 3 models, a 27.5, a 30, and a 35-foot bus. For routes that don’t have the same amount of traffic, this company is able to build a bus that is more efficient, cheaper and more durable than the alternatives. They’ve been in business for about 4 years and trying to build everything up, and are now getting at the point where they are actually going to be cash flow earnings positive.

Bruce Campbell (2)
President & Portfolio Manager, Stone Castle Investment Management Inc. http://www.stonecastlefunds.ca

2 Comments

mountainpose

November 1st 2016 at 6:50pm

I spent many years selling very expensive equipment to the federal government and municipal governments. The process involves an initial purchase, a test/trial period, and then a specification for tender written in such a manner to make the product "exclusive" or "no substitute". Once approved the orders flood in. So you go from one sale to fifty overnight!
Second, if you have already sold to one government agency the testing process is not required for other departments and you get a massive acceptance across the country. The more nervous purchasing departments in other municipalities are now comfortable as "someone has already bought one". This is an exclusive product that in my opinion will be a " no substitution " item. The next step in the tender process comes from the company as they advise the purchaser of the backlog time...and it grows like mad! So, the company tells the client that they will not accept less than "X" number of orders (a non-cancelable option for purchase). Now you have created a huge backlog with firm orders and an emerging scarcity environment. This gives the company pricing power and margin protection. Also,once a municipality has opted for a new bus they will need parts and training for service purposes. They do not want twenty different models in their fleet. That is why there are so many 40 foot buses on backlog. Ease of entry with a new expensive product is very difficult. I have been investing professionally for over forty years and have never been lucky enough to buy a stock at the perfect inflection point which is occurring now.

barney11

November 29th 2016 at 2:23pm

Mountainpose-Great, valuable input however, I have no experience like yourself but have looked at this company from every angle and want to invest. Unfortunately, in such opportunities you either go big or not at all. So, do I trust your experience over S&P's strong sell recommendation and the fact Campbell Et:al have a history of some pumping then selling at the peak before a major and sometimes permanent pull back?????


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