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

One of Canada’s best operators in retail. Convenience stores and gas stations. They are in all Canadian provinces and in 42 states. They are also in Scandinavia, Ireland, Baltic and Russia. Recently bought the Circle K company, and are converting a lot of their stores over to Circle K. Dividend yield of 0.6%. (Analysts’ price target is $72.)

This has done very well. Growth through acquisitions. They’ve benefited from a lot of big oil companies getting out of retail. Have also bought assets overseas. They tend to integrate assets quite well. Because they are gas stations, there is a question about traffic weakening or electric cars, and what is going to happen to gas stations. Expects the company will make some moves to address that. The stock has never been priced inexpensively, and the multiple is quite full. If you’ve done well on this, it probably would be prudent to take some money off the table.

Metro is doing what he expected by selling some of their stake in this company, to fund their Jean Coutu (PJC.A-T) purchase. Valuation is attractive, and they are going to put a whole bunch of Tesla stations in their locations. Dividend yield of 0.6%. (Analysts’ price target is C$72.)

This is finished. It has a market cap of $32 billion. The problem is, it is so big that it is almost impossible to find anything that will really impact the earnings any more. It has had a long, successful run. There will be a lot of pressure on management to keep going. The catalyst has always been those big acquisitions. Now they have to be so big that they are almost impossible to find.

MRU-T will sell some of their 10% holding in ATD.B-T in an orderly way. The stock price leveled out over the last couple of years. He would like it if it pulled back a little. The forward looking PE is 17, a little high. He would not buy it today while this M&A is going on.

Metro (MRU-T) is in talks with Jean Coutu (PJC.A-T) deal? They will have to sell their holdings in this company to finance the deal. Should I sell? This is correct. You have probably done very well in Couche-Tard, and it is never wrong to take a profit.

(A Top Pick Aug 19/16. Down 3%.) Has basically gone nowhere over the last 2 years. However, their earnings continue to grow. A tremendously consistent return on equity generator at around the low 20%. If you can buy this below $60, you should. All it takes is for them to come out with an announcement of taking over another chain of convenience stores.

He likes the rising volume of products being pushed through their stores. As it starts to get to a critical mass, there could be integration opportunities and continue to shave costs off. There could also be tuck in acquisitions. Dividends went up more than 3 times in the last 3 years. The convenience business is a place where we all go visit when we buy our gasoline. This has exposure to the US and to Europe. A well-run business, and should continue to do well. (Analysts’ price target is $72.50.)

(A Top Pick Oct 31/16. Down 10.7%.) Still believes in this. A rapid growth by acquisition. They run a big chain of convenience stores and gas stations in Canada, the US and northern Europe. Just closed on their largest acquisition, CFT Brands, a couple of months ago. Then they launched another take over of the Holiday chain convenience stores. Stock is cheap and undervalued, and he is still buying.

Writing Put options. If the stock went in the money and were Put to you, would you take the stock or Buy it back to close a contract? He would take the stock. It is a good company and he likes what they are doing.

He owns PKI-T instead. ATD.B-T is international and is way bigger. They make more of their money from convenience store sales. When the economy softens they don’t do as well. They did a number of large acquisitions last year and the market wants time to digest them.

(Top Pick Jul 12/16, Up 6.45%) We are going to see Circle K everywhere in Europe.

It is a good time to buy. A year or so ago it looked a little rich and he was not recommending it as strongly. Now it keeps continuing to impress. The valuation is improving. Their return on capital is improving. He admires the company.

A wonderful business. They built an amazing success story. Makes a lot of money from selling cigarettes at gas stations. It has gotten so large for them to make another acquisition, it would have to be a whopper to move the needle. You can own this going forward, but you just have to be cognizant of the risks.

Just reported and had pretty good numbers. A relatively mature industry, but they are consolidators. They buy assets and integrate them in. With the recent downturn in energy, the major energy companies are pulling out of running gas stations, and this company is a natural acquirer of those. That is how they maintain their growth. Thinks this is fully valued.