AutoCanada Inc. (ACQ.TO)

It is cheap. It is Alberta oriented so took a hit. The risk is that it is probably not down enough if oil does not recover. Bet on something that is not energy dependant, such as ATD.B-T.

The bulk of their holdings are Alberta. Recently did an issue because they grow by buying more and more dealers. Doesn’t think that game is over. The issue is Alberta and what does a slowdown in the Canadian economy mean to them. He is looking at this because 5-7 years out Alberta will recover and it is not a bad underlying business.

There is always a latent effect when an industry, in this case oil, starts to fall apart. The company is based in Edmonton and a lot of their dealerships are in Alberta. Things are going to get a lot worse there. There will be job losses. Thinks this is going lower, and he would avoid it.

He does not have a seasonal comment, but it is in a down trend, below 20 day and momentum indicators are negative.

There was a big slide from mid-2014. There has now been a positive break out from a technical perspective. If this builds a strong base over time, that would be a good thing. He would be more interested in looking at this during the February-April time slot.

He got out some time ago, but auto sales have stayed quite strong. The auto dealership sector is moving from individual ownership into large pools. It still has some room to go. It moved with the price of oil because of western exposure.

Has a lot of concerns about this company. This is a rollup strategy in car dealerships primarily in Western Canada. The price of oil and the economy, to Alberta in particular, has now been translated directly to auto sales within Alberta. There are a lot of headwinds. He is looking at this as a possible Short again.

This was a very hot stock. They buy up auto dealerships. Unfortunately they have ended up with probably too many dealerships in Alberta. Thinks the jury is still out on just how deep the slowdown is going to be in Alberta. It is a high risk stock, and he would be inclined to sit on the sidelines until oil gets to $65 or higher and it looks like Alberta starts to perk along better.

A corporate owned auto dealer. Owns lots of dealerships across Canada, but with a high concentration in Alberta. If Alberta is suffering, at some point new car sales in Alberta will weaken. This is going to trade pretty much like an oil stock. He would be cautious on this now.

Got caught up in the energy downturn. This stock is a recent purchase for his company. ACQ-T have been increasing their dividend. When it came off, he looked at it and said it is a good fundamental business. It had a short term setback and looks pretty attractive. It is hard to say if there is any more downturn. Service and parts would offset any decrease in new car sales

Car dealerships, mostly in Alberta. The stock was a darling with a very high multiple that was priced for perfection. Doesn’t like the business. It is an acquisition story and in the end it is car dealerships. If you have a long-term view, you could probably hold it as he doesn’t think it goes down much more. Based on the valuation, there is no reason it couldn’t go down another $5.

(Top Pick Jun 5/14, Down 54.23%) Anything energy related was hit. It got impacted very hard with the selloff in Alberta. It was a high growth stock and a lot came out with the oil story. He got out in October/November. He is looking at it again, but looking to see how oil settles out.

Has a small Short position in this. Have a lot of Western Canadian exposure, which is likely going to pressure their sales. Expectations for a rebound are probably overstated on the street. Thinks analysts estimate earnings are going to come down, which will keep the stock under pressure.

(Market Call Minute.) Looking very carefully to get back in. It is in line with its peers, and probably has a higher growth rate.

Very volatile with its prime focus on western Canada and Alberta, where they have a large number of their dealerships. His concern is their debt side. How they are going to continue to grow, with the debt levels they have, is too risky for him.