Alimentation Couche-Tard (B) (ATD.B.TO)

He would buy with fresh new money. It has come off over the last 6 months but seems to have bottomed from a technical level. It is a great Canadian home grown success story. They are one of the biggest and best operators in the world. There are about 120k 'C' stores in the US, mainly 'mom and pop'. Gross margins in convenience stores are 10 times fuel margins.

He likes this. It had a flat year. They're re-branding their Canadian convenience stores to Circle K. They are good acquirers and fine at creating synergy. They are active buyers in Europe as well as the U.S. and those purchases are
accretive. E-cars will probably have an impact, but they have been testing charging stations in Europe. He's not worried about e-cars; they're 10 years away.

The stock is presenting a fair valuation at these levels. It is a very good company with multiple brands. They have expanded into Europe, where in Norway they are involved in electric vehicle charging. From a technical perspective, the monthly chart is at long term support (200 month moving average). He is not a Canadian consumer staples player, but views this as a good buy for investors with a 2-3 year time horizon.

Up to recently this had been a core holding. They are selling out as they are seeing better opportunities lately as it has traded sideways for almost two years. The ROE has consistently averaged 20% -- twice the market average.

He'd like to see the price go back to $62 in the middle of the trading range. A good company, but it's not a good stock. He needs to see some price appreciation. The street is too bullish. It's hard to dislike this well-respected company.

(January 12, 2018, Down 16%) Now trades at 13x earnings, a great level. They've made so many acqusitions that investors expected same-stores sales in the U.S. to be very good, but in Q1 they were weak. Share fell. But he's added to his position. There's strong EBITDA growth. Good to own at a five-year horizon. E-cars are a valid question and how they effect ATD's gas stations, but in Europe there are e-charging stations. We're hitting peak driving season with 65% of gas stations in the U.S.

This has been a great growth story, but he feels it may be too expensive for growth that may be coming in the future. The current multiple is excessive in their opinion.

It's expensive now. It has a decent balance sheet and they know what they're doing as they expand. But the stock is stuck around $50 and doesn't excite him. It's dead money. Thin profit margins in this business at 2.9%.

The stock has been sideways. They're rebranding to Circle K, the U.S. branding, here in Canada and eventually in Europe. The stock hasn't done anything wrong, but it's a consumer stock lumped into the consumer sector, which is struggling. He's worried about their next report--they may be squeezed on margins due to rising oil, but overall he likes this stock for the long term.

When there is energy price volatility they can get a quarter or two lag in earnings growth. However when fuel prices go up they get higher margins. (Analysts’ target: $74.00).

Would selling marijuana help their business? Everybody talks about downstream market for cannabis Fundamental score of this company is very strong. Thinks the company is overvalued. He will wait. It has been an acquisition model. It usually comes down after an acquisition.

(Past Top Pick on July 12, 2017, Down 13%) They just suffered a rare, large earnings miss. Weakness mainly came from U.S. fuel margins. He's confident they can come back, and this current pullback is a buying oppportunity. They're growing earnings at 18%.

There’s only so many gas stations to buy. Over the past years, they have added tremendous value with prepared food in gas stations, and other services. At some point, there is a limit. The EV/EBIDTA ratio is now near the company’s 5-year low. However, the current weakness in Couche-Tard’s price might be transitory and he is interested in buying at this level. Gas retailers have a hard time when gas prices are rising quickly because it is hard to raise retail prices in line with wholesale. However, these companies make it up as prices go down, lowering rates less quickly than wholesale. He continues to be bullish on energy, which suggests further increases in gas prices and further pressure on Couche-Tard. He is looking for an entry point to buy the stock.

(A Top Pick March 1/18 - Down 14%) Still likes it. Hurricane season last year really affected their distribution center in the US. Same-store sales in the US were also weak. They are very well diversified. At 13.5 times earnings they like it even more now. They just added to their position.

Recently bought this name. Very well-run company. Its been a tough market for the last couple of years. Margins are lower. They own a lot of the land where the convenience stores are that acts as a put option.