Alimentation Couche-Tard (ATD.TO)

The founder built an empire from a corner store. It is well managed and has made good acquisitions. It is a good company to have for the long term.

Great growth story. Seems a mediocre business, but has done a spectacular job making acquisitions and cutting costs.

Global leader, geographically well diversified. Most revenue comes from fuel. Soft earnings this quarter, due to gas margins and reduced same-store sales; Canada was more impacted than Europe or US. 

As inflation comes down, rates will come down, and consumer spending should pick up. So he expects higher earnings going forward. Strong balance sheet ready to go with more M&A. Buy here, hold long term.

(A Top Pick Jun 23/23, Up 25%)

Excellent business with very strong margins. Will continue to own shares. Has owned for 20 years. Very strong management team that is excellent at capital allocation. Recent M&A trends very strong - ability to execute well on this aspect. 

Correction since March. Now in a holding pattern between $74 and $82, consolidating, digesting previous gains. Would be a concern if it took out $74 support.

Correct. About 40% of gross profits comes from fuel. Putting a big push on its merchandise. Was trading below its historical average (17.5 PE) a few years ago, took off, and then became a momentum stock. Trading around 27x PE, overpriced. Hybrids, not EVs, are the threat.

Still, seems to be doing all right in European countries where there are lots of EVs.

A better choice than PKI.

Flies under the radar for many investors. Started in 1982 with 1 convenience store in Laval. Now 14-15K stores across the world. Excellent operations in Canada, US, Europe, Asia. Industry still quite fragmented, so still long runway for acquisitions. Marries operational excellence with capital allocation. Yield is 0.9%.

It has come off. Although not a fast growing company, its price ran up this past fall/winter. Its valuation is typically 17 to 17 1/2 times earnings but it is now in the mid 20's. Be cautious - don't buy now in case the valuation goes back to its average.

Leader in its space, incredibly well run. Add here. Rare example of a Canadian retailer doing well in the US. Tends to be soft when economy slows. Phenomenal long-term investment. Spectacular acquirers. Incredible value-creator.

M&A activity very strong in the past. Excellent management team with sharp capital allocation skills. Compounded rate on investment has been good for investors. If economy falls into recession, not goof for business. Would recommend holding shares, but not adding at this time.

A lot of stocks are in these tight trading ranges, and at some point they're going to break out of that. Probably a good entry point. Canadian name with international flair. Well run. Long-term shareholders have been rewarded.

Global leader. Very well diversified geographically. Most revenue comes from fuel; the rest comes from snacks, lottery tickets, and merchandise. Serial acquirers, most recently from Total. Strong fundamentals, good profitability, attractive multiple. Yield is 0.9%.

Have 17,000 locations globally and they just bought a company that gives them a presence in Germany and Belgium.  7-11 is 5x larger, but there's a lot of room for ATD to grow, because 60% of convenience stores globally are run by Mom and Pops. They were disciplined in 2020-1 and are now buying companies strategically. Half their business comes from non-gas, so they're adding car washes and fast food restaurants. The dividend has grown 23% annually over the last 10 years.

Wonderful company. He took advantage of recent weakness to add. Global. Good at capital allocation. Generates tons of cash, with lots of options for what to do with it. Last quarter was choppy by company's standards. Very attractive valuation.

Unique, because this business is hard, and not many can generate the margins they do. As they've gotten bigger, can consolidate sourcing and this further helps margin profile. This is their unique advantage over competitors.