Alimentation Couche-Tard (ATD.TO)

Hands down, slam dunk in favour of ATD. Bigger and better. Scale is a significant advantage, especially on sale of fuel. Better at merchandising. More diverse global footprint. Amazing serial acquirer. Hunting big game with bid for 7-Eleven. He's OK holding whether it gets 7-Eleven or not.

PKI has an activist investor rattling its cage for some time, with no resolution in sight. Activists usually get involved when assets are being mismanaged or under-managed, or management team's off course. Not earning same profits as ATD, despite similar end-markets.

He doesn't own it based on ESG grounds--a large art of their business is selling tobacco. The company is so large that organic sales are flat at the convenience store and gas station level. They must make ever-growing acquisitions to move the needle. It's not obvious they will succeed in buying the massive 7-11 chain; the Japanese government is resisting the deal. ATD growth looks unclear.

It is a great company with a great M&A strategy. He likes it but would choose a competitor a lot smaller with a similar type of model.

ATD is a tremendous capital allocator over many years. They don't overpay when buying companies. Is confident they can synergize 7-11, which would be their biggest purchase ever. Buy on any pullback. Is not afraid of an equity dilution, because there's a need for it sometimes.

It is looking to buy a company with 5 times as many stores and it means buying all these new locations for $600 000 each. If it improves these locations it could be a big win for ATD shareholders. Generally its merchandising hasn't been living up to expectations.

Incredible business over the long term. Regardless of short term concerns on 7-Eleven M&A, would be a great investment. Good for long term investors. 

Are good at buying companies and synergizing. 7-11 would be a huge deal and ATD can unlock synergy. There's a question of ATD diluting shares to pay for the deal, but the deal will be creative and the PE will rise after the deal. Also, a government could block the deal on anti-monopoly grounds. This pullback is probably a good opportunity.

Poised to take a giant, bold leap forward with proposed friendly acquisition of 7-Eleven, the largest convenience store in the world by # of outlets. Biggest by market value is actually ATD itself. Acquisition is a big "if", would be synergistic. Shrew operators, extremely capable serial acquirers in a fragmented industry.

Fingers crossed for success in Japan. They won't do a deal unless it creates shareholder value. So if a deal is successful, you can bet dollars to doughnuts it will be priced well, strategic, synergistic, and will be reflected in a higher share price in due course.

They have a good track record of buying an integrating gas stations. The 7/11 deal is complex. 7/11's parent company is worth US$38 billion vs. ATD's C$75 billion. This could take years, and the Japanese parent has to review the deal and settle on a price (nobody knows), then there's regulatory approval in the U.S. ATD's net debt-to-EBITDA is 2.2x which is in their target range, so ATD will have to issue equity. She wouldn't buy this, based on this deal.

Amazingly well run. Talented founder is still there; probably won't see anything negative until he leaves. Cigarette consumption continues to drop worldwide, gasoline consumption will probably follow. So you have to rely on snacks and acquisitions for revenue growth. 

Still opportunities, no reason to sell.

Absolutely wonderful. Well run. Very opportunistic on capital allocation. Circle K stores are popping up everywhere. Today's valuation of 18-18.5x earnings puts it above his buy price; he'd prefer a multiple point lower. Don't chase.

Very difficult to make money in this space, but they have a formula that works and is difficult to replicate. As they get bigger, they have scale and pricing power, which improves profitability.

He's owned this in the past. It has done well. It comes down to consumer spending. He likes their long-term fundamentals. Also look at Parkland.

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.