Alimentation Couche-Tard (ATD.TO)

Continues to execute M&A and current operations very well. Expects higher fuel margins and better merchandise sales next quarter, as we've just come off the summer. Headwinds in cost of goods due to inflation. Potential to charge EVs at home is not a threat.

Almost 70% of revenue comes from US, less than 15% from Canada, the rest from Europe. Master acquirer and they execute extremely well. Quiet, not flashy, management. Not much of a yield, but free cashflow used to buy back shares and do M&As. Even after the runup, he'd buy.

Great long-term hold. Quality, great management team. Balance sheet continues to improve. Gas margins holding firm. Travel continues. Never a bad time to add this name, if you think in years and not months.

The world's 2nd-biggest convenience store operator. Highly profitable at 25% ROE. Compounded earnings per share at 21% over the last decade. They price sharply on fuel to lure customers to buy high-margin products in their stores, like coffee, cigarettes, donuts. Remain smart acquirers in a fragmented industry. This year, they bought 2,200 stores in Germany, Belgium, Luxembourg and Holland. Organic growth continues to rise.

(Analysts’ price target is $77.07)

Great defensive company. Global leader. Geographically diversified. 14K stores in 24 countries. Buys and integrates assets  like a well-oiled machine. $10B in cash. ROE well above market. Small dividend yield is OK, as company likes to grow.

Current share price is a good place to buy.
Very well run company with excellent capital allocation skills.
No price target - but $80 range would be safe.
Strong business for the long term investor. 
Provides international exposure through asset base. 

Beautiful and strong chart, up and to the right. Permanent part of your portfolio. Breakout to new highs targets $75. These are the kinds of charts you want to be looking for as you hunt for names to put in your portfolio.

The caller was wondering if the rising numbers of EV's will affect the business. Internal combustion cars will be around for a long time and Couche-Tard will adapt to the EV market. He feels it is fairly priced.

He missed CTC.A on macro concerns. Great business, one-stop shop, attractive loyalty program. Good company, not expensive, so you can own it for a while.

ATD has done pretty well, but he'd prefer CTC.A for the next year or so.

Expecting quarterly results at the end of June.
Expansion has been rapid (13,000 stores) in USA & Canada.
2nd largest convenience store business in North America.
Very good at M&A with lots of opportunities.  
Recent acquisition of Total convenience stores in Europe also positive.
Expecting a stock price re-rating. 

 

In a recession, consumers will buy down, which benefits ATD who is the second-biggest owner of convenience stores globally. Likes their geographic reach. Are piloting an EV charging station program in Norway, testing there, which could expand across the world. Also, they've developed their in-house brands, like sushi, including healthy snacks to eat while you wait for your EV to charge.

Dividend is low because they continue to go out and buy. As long as the company thinks it can earn a better rate of return on its purchases, it shouldn't increase the dividend. Lots to like: scale, good at acquisitions, global, loyalty program. Gas margins do add variability. At all-time highs, but can continue to grow.