AutoCanada Inc. (ACQ.TO)

Thinks this company has a bright future ahead of it. The consolidation thesis in auto dealerships is a good one, and they are doing a great job with it. Increasing their dividend very consistently which is something he likes. 1% dividend yield.

He cannot foresee any time of why you would want to sell this. The largest publicly traded multi-dealership company in Canada. A lot of dealerships are being run by families that want to sell, so there is a consolidation in the industry. When they buy a dealership, they are able to increase sales, service revenues, insurance revenues and financing revenues. They increase the overall cash flows which they can use to buy more dealerships.

(A Top Pick Oct 16/13. Up 103.65%.) Just announced a BMW dealership in Québec so it is another new car line which they feel will add $0.10-$0.15 in earnings to the bottom line. Recently announced that they are going to a dealer group. Trading at a fairly high multiple, and a lot of this is built into the stock. Two cautions would be that 1) it is trading at 30X earnings and 2) if car buying starts to slow, the multiple is going to compress.

The only publicly traded auto consolidator in Canada. Derive their revenue from 4 sources, auto sales, used autos, repair and finance. Going from 25 dealerships to about 40 currently, in a market that has 2500 dealers. Has huge explosive growth through accretive acquisitions. M&A potential for them is immense.

(A Top Pick April 3/13. Up 230.67%.) Has been a great story. Growing through acquisitions of dealerships. Good CEO. Have a head start on anybody else in Canada. Still likes it.

Growth by acquisition. 42 dealerships in Canada giving them 4% market share. The gross margins on sales of new and used cars is 8% and the gross margins on the repair shop is 67%. This is one where if you made a bunch of money trim some because at some point the treadmill will stop and the stock will fall.

(Top Pick Oct 16/13, Up 61.98%) 33 dealerships of 3400 in Canada. This is their potential clientele. Ford is one dealership that they do not have. Just made inroads into GM. Many of the owners are looking for an exit strategy. You could see someone else start this, but they have to be an auto dealership now. The other thing is access to capital. ACQ has that. Every time they make an acquisition, they are accretive. The only thing to worry about is if auto sales start to slow down.

Are buying dealership after dealership. Biggest problem is if auto sales slow down. With the currency, it would be hard for a private owner to compete with them when it comes time to buy a dealership.

Not a big fan of this. Had a huge, huge run. Definitely a candidate to be added to the TSX 60 index and he thinks there is something like 800,000 shares of potential demand from indexers. On the index event, that might be a decent time. He will probably be taking a look at Shorting.

(Top Pick Mar 20’13, Up 241.53%) Good news today – an acquisition today. The Detroit big three did not want to sell to them in the past, but are more open to it now. Lots of scope to keep going. Will double again in the next few years because of their relationships with dealerships across Canada. They gain the trust of dealerships ready for when the owners want to retire.

Has 33 dealerships and there are 3400-3500 that are potentially for sale. Her assumption is that they only Buy 3% of all available dealerships over the next 10 years. That would be 100 dealerships. That is triple their existing holdings. Have also talked about being in negotiations to Buy a company that owns a multiple of these dealerships, which would be nice. Yield of 1.55%.

(Top Pick Oct 16’13, Up 15.98%) He got a good run. They will continue to have a great run ahead of them. Buying a dealership a quarter. Maybe they get a group in an upcoming quarter. Dividend as well.

One of the largest public auto consolidators in Canada. There are a large number of individual franchisees that are getting on in years and want to monetize assets. There is still a very long runway for growth here. Recently announced their 12^th consecutive quarterly dividend increase.

An interesting uptrend. 45 degrees is the best slope you can have. Stop loss is a definite about $37-$40.

(A Top Pick Oct 16/13. Up 13.48%.) Company continues to grow. They basically go out and acquire car dealerships.