Stockchase Opinions

The Panic-Proof Portfolio (Stockchase Research) AutoCanada Inc. ACQ-T PAST TOP PICK Nov 07, 2023

(A Top Pick Sep 21/23, Up 8.1%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with ACQ is progressing well.  To remain disciplined, we recommend trailing up the stop (from $21) to $23 at this time.  

$26.760

Stock price when the opinion was issued

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PAST TOP PICK
(A Top Pick Sep 22/21, Down 44%) Underlying trends are still solid. Trades at 6x. The war in Ukraine, further supply problems, Fed really hiking. Super cheap. Company's buying back shares. You can add on dips, be patient for a 3-5 year horizon. No dividend.
DON'T BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Struggling with broad market weakness. Investors are throwing in the towel. Has to prove it can meet expectations. Turnaround might be taking hold.
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

ACQ operates 85 auto dealerships in Canada and also in Illinois.  They also operate service and repair centres, which processed 900,000 orders in 2022.  Recently reported earnings showed an almost doubling of net income.  It trades at 7x earnings, 1.1x book value and supports an 18% ROE.  Cash reserves were steady, despite aggressively retiring debt and buying back stock.  We recommend a stop-loss at $13, looking to achieve $30 -- upside over 75%.  Yield 0%  

(Analysts’ price target is $35.31)
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This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

We reiterate this operator of auto dealership franchises as a TOP PICK.  It trades at 7x earnings and under book value.  It supports a ROE of 19%.  Cash reserves are growing while debt is aggressively retired and shares bought back.  We recommend trailing up the stop (from $13) to $15, looking to achieve $26 -- upside potential of 40%.  Yield 0% 

(Analysts’ price target is $26.35)
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This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

We reiterate ACQ as a TOP PICK.  Strong consumer demand and constraints on light vehicle supply have combined to create record industry profitability in the auto dealership sector.  Higher interest rates have taken away some of the momentum, but the company recently reported higher cash reserves, while they aggressively retired debt and bought back shares.  It trades under book value and 7x earnings.  We continue to recommend a stop-loss at $15, looking to achieve $26 -- upside potential of 31%.  Yield 0%

(Analysts’ price target is $26.35)
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This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

With a network of 65 auto dealerships in North America, we reiterate ACQ as a TOP PICK.  It trades at 7x earnings, supports a 17% ROE and is right at book value.  Cash reserves are growing, while the company aggressively retires debt and buys back shares.  We recommend trailing up the stop (from $15) to $17, looking to achieve $26 -- upside potential of 23%.  Yield 0% 

(Analysts’ price target is $26.35)
premium

This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Aug 08/23, Up 38.3%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with ACQ has achieved its target at $26.  To remain disciplined, we recommend covering half the position at this time and trailing up the stop (from $17) to $21.  

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This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

ACQ, who holds 65 auto locations and has over 15,000 vehicles in inventory, is reiterated as a TOP PICK.  Recently reported earnings showed a 30% increase in EPS.  Cash reserves are being prudently used to aggressively retire debt.  It trades at 7x earnings, 1.2x book and supports a 21% ROE.  We continue to recommend a stop at $21, looking to achieve $31 -- upside potential of 24%.  Yield 0%   

(Analysts’ price target is $31.50)
premium

This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Sep 21/23, Down 7.6%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with ACQ has triggered its stop at $23.  To remain disciplined, we recommend covering the position at this time.  This will result in a net investment gain of 16%, when combined with our previous recommendations.