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

(Market Call Minute.) A long-term Buy.

This stock hasn’t done anything wrong, and yet it has pulled back 15% from its peak. There is a fuel margin aspect as to how well they do at their convenience stores. They are still going to make acquisitions, although they are going to be in Europe. For the 1^st time in a while, it is trading at under 20X. A growth story that you can buy on sale. Dividend yield of 0.51%.

(Market Call Minute.) Everybody and their brother owns this, but it is still a buy. It is defensive and good, and has been generating a decent cash flow.

It is hard to argue with this company’s track record. It has been a phenomenal business. They’ve grown aggressively through acquisitions. As they’ve rolled up the convenience store space in Canada, US and Europe, they’ve been able to take best practices and improve margins and garner significant synergies. It is hard to argue with their track record. A good, long term business to own.

Had been a holding for a long time, but no longer has this because it’s price momentum started to roll over. As the cyclical rally took hold in Canada, and some of the deep value stocks ran up this one, all of a sudden, looked relatively more expensive. Has relatively poor price momentum. A solid company with 26% ROE and the valuation is still quite reasonable.

It seems to be breaking down right now. The highs are getting lower and the lows are getting lower and the trend line has been broken. Don’t get into a new position. Possibly even take profits.

The chart shows a big rolling top over the last year. Technically he has a $42 target. There are some better places to be in this sector. Feels the volatility is going to continue until the value players start picking this back up.

They have a dual class share structure and he is not crazy about it. They are in a lousy business but did an amazing job. He does not own it because it is too expensive. An unbelievable Canadian success story.

Thinks the dual-class share structure is part of the reason for the stock’s decline over the past 2-3 months. But also, many people have been buying the stock for exposure to gas margins, which have been very strong in the past year. Now people are starting to be concerned about a reversal of fuel margins, which would impact this company negatively. A very solid company with their acquisition strategy and their execution of it. If it gets down to $50-$51, that would be a great bargain.

One of the biggest winners in Canadian history. He has known the management team for 15 years they are doing incredible acquisitions. People understand that they don’t play up for acquisitions and are good stewards of capital. It is a core holding for him. They deserve a larger multiple. He would be a buyer here.

Convenience stores and retail gas operations. They have been moving into Europe and buying lots of European operations. This is really a valuation play. They are trying to change the non-voting super share structure, so that when the youngest founder turns 65, it collapses and goes into regular shares. It is $10 cheaper because of the controversy on this. Dividend yield of .50%.

He likes the business they are in, and their business model. They just made an Imperial Oil acquisition, as well they are expanding in Europe. He does not own it because he does not think it is cheap enough. The company is trying to protect their family including their children with special privileges, although they have done a good job running the company.

This has been as high as $61. It is a consolidator. They have been a beneficiary of energy, because Imperial, Shell and Europe have been selling their gas stations. Thinks they have suffered from being a source of funds for people to buy oil stocks, because they have been a kind of reverse indicator. It is back under 20X earnings for the 1^st time in a while. Management is really good. Dividend yield of 0.50%.

Doesn’t know this particularly well, but does know that they did very well on gasoline. With gas prices low, he thinks it hurts the margins. If you own, find out to what extent the gasoline margins affect their earnings, and make your decisions from there.

There is some conversation about the dual class shares and their ability to move to a single class share. His first instinct last week was that this was a great buying opportunity, but was very surprised to see the shares down today. It is getting to his personal threshold, being big believer in using stop losses. Technically it has breached, meaning that anything below $53 implies it is going to hit $50. It might just be profit taking. Doesn’t see anything fundamentally wrong with the company.