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

(A Top Pick Aug 29/16. Down 10.9%.) The consumer staples group as a whole, has been a source of money for investors chasing more procyclical exposure in energy, and in some cases gold or base metals in the 4^th quarter, or even industrials or financials. He continues to Buy this.

This has been a tremendous value creator in the Canadian consumer space. The leading convenience store operators in North America. From Québec, they have expanded into the US, Scandinavia and the Baltics, and are poised to make their largest acquisition yet, which should be about 15% accretive to earnings. The founder has aspirations to double the company in size again in the next decade. The industry is still fragmented, and some big chunky assets should still come up on the block in the next couple of years. Dividend yield of 0.6%. (Analysts’ price target is $78.36.)

Still thinks there is upside, but this is not a screaming buy. You are getting a great company, and he will Buy a great company that looks a little rich from time to time. He would still buy this.

This is off its highs. The group is a bit out of favour. It is growth by acquisition, and they are really, really good at it. If you calendarize their earnings, you get a 15.5 multiple, which is the cheapest it has been in almost a decade. It still has good growth coming from its European and US acquisitions. You don’t buy this for yield, it is a growth story. Thinks it will get into the low $70s, which will still give you 15%-20%. Dividend yield of 0.59%. (Analysts’ price target is $78.36.)

The market is so hot, and these stocks have all reaped the benefits of a hot market. If you are a buyer and you want to make a trade, you are playing with fire at these kinds of levels. There is nothing technically that would tell you to Sell. However, volumes are very flat, and the stock is just chugging along while the market is very hot. Be careful.

It is a nice time to buy. You had a bit of a dip in the stock price because they are considered to be a consumer stock. There is an expectation that rising oil prices will negatively impact their margins, which he does not agree with.

A Canadian/International growth story in convenience stores and gas stations. He likes that they are changing all of their brands, except in Québec, to Circle K. Smart management.

This has been a great story. It would fall into the growth camp of companies, where people are expecting growth to continue at a tremendous rate. They have really expanded on a rollup basis. He is always careful about companies where all of their growth comes from acquisitions. The multiples are just too large for him to handle.

(Top Pick Oct 31/16, Down 8.46%) It reached a high water mark 5 weeks ago. Then a lot of things changed post-election. People failed to grasp that they are throwing the baby out with the bathwater. This one is classified as a consumer staples stock, but it is actually a growth stock. There is some indiscriminant rotation out of some names. This stock is represented in a number of low volatility ETFs. The acquisition environment for them is as ripe as ever and it should be clear sailing for them. He added to it a week or two ago. You can buy on weakness.

He has been buying on weakness. It is a great secular growth story in any space. They are the leading convenience and gas station operator on two continents. High 20’s ROE, mid teens multiple. Great acquirers. CST brands is the biggest acquisition in their history. (Analysts’ Target: $78.36)

His model price is $76.27, a 26% upside from $60.60. If you can get this at $50, that would be a fantastic buy. If you don’t own the stock, he would wait for $50. The current valuations are still cheap compared to his model price.

It recently broke a support level and formed a double top. It is now starting to underperform the market. This is not a good sign. For the next three months you should look for better opportunities elsewhere.

He is steadily selling off his holdings. It has exceeded its FMV by about 20%. The stock has done well, but to keep going the way they have, they have to make larger and larger acquisitions. His experience with consolidators is that eventually they reach the stage where they make a catastrophic acquisition, and the stock goes down.

A great company. It is probably at some of the highest levels that it has been, but they keep doing everything right. He would try to get it a little bit lower.

A great Canadian branded company. It has been acquisition-driven, growing in the US and Europe. It is a classic case of a rotation where people are selling their winners to buy names that will benefit from a Trump presidency.