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

In the developed markets, energy is driving them. One of the key themes is the consumer sector. These guys are low-end consumer discretionary. They did a great job of building their business. They also made great acquisitions and did a great job of executing. It looks very attractive.

It is one of his top holdings. It has represented the best combination of all attributes until very recently. It is trading a little rich these days, but they have beaten earnings consistently until very recently. His concern is that these staple and consumer stocks have had a good run because of funds flowing into the sector and rotating away from energy. So valuations are starting to get a little stretched. Price momentum has started to shift and we are seeing a little bit of weakening. It is a very well run company and can grow through acquisition and do so outside of Canada.

In a business where they have shown themselves to be very successful. Have been successful in acquiring more stores, more gas stations. Really good at what they do. With the slow but steady expansion here, and in the US, he thinks there are more opportunities for them. They are going to do all right. Thinks there has been some profit taking here. You could start to buy it here.

This is been a huge winner on the stock market. Made some big acquisitions that they integrated fairly well. It still has a lot of work to do in terms of integrating. They have never run a big company before.

(Market Call Minute.) They have done all those acquisitions and have a lot of momentum behind them. They really need to make another big acquisition to shake things up because they are way over their FMV. He would call this a business man’s risk only.

A good stock. Convenience stores/gas stations is an incredibly good business. Very stable and defensive. If we continue to go through a period of time when the market trades sideways, or even down, this will be the stock to hold. It is pricey because so many people do think it is a good stock, so valuation is full. He would suggest you buy a little when you see a pullback of 5%-10%. Otherwise stay on the sidelines.

This is a good company. They have executed very well over time. He is a little cautious on entering. You could get a starting position. The formula works and they are in Europe and it is working well. This stock is being supported because the resource stocks are doing so badly.

If he owned, he would be taking half off the table. A lot of their growth has been by acquisition, and he doesn’t know the pace that they can keep that up. Has a market cap just over $20 billion and is trading at 24X trailing earnings. Paying a minimum yield of about 0.4%. If it doesn’t keep growing, you could see a lot more downside than the potential upside from here. As a value investor, he would not be buying any more.

Dollarama (DOL-T) or Alimentation Couche-Tard (ATD.B-T)? The consumer sector has been one of the most resilient sectors in the US, and then there is Retail which looks very attractive. In retail, the lower cost providers are in the sweet spot like both of these companies. He would have no problem buying both of these. Great companies. Both pulled back in the last week or so, giving good entry points.

This has been an all-star performer and has been very successfully making lots of acquisitions. The valuation seems a little too rich. This is a company that you could probably buy on a pullback and hold in your portfolio for years and years to come.

This has done really, really well. Has been on an acquisition spree for the last 5 years. They have benefited from strong gasoline margins, bigger spending at convenience stores and going out globally and finding convenience store chains in Europe that they have been purchasing.

It has done extremely well. They are a serial acquirer. It will do some plateauing before the next acquisition. He would wait for it to move either up or down.

Alimenation Couche-Tard (ATD.B-T) or Jean Coutu (PJC.A-T)? This had missed immediate expectations, but their growth profile was absolutely excellent. Just announced they were going to be purchasing 315 more stores in Denmark as well as the servicing of fuel for aircraft in Europe. Growth prospects are probably better for this one, simply because of the International Field they have. He would probably wait for it to consolidate a little bit further down.

(Market Call Minute) They know they will have a miserable earnings number and waited to release it until an acquisition took place. They can keep going for a while like this.

They report tomorrow. Does not sound like a massive transaction in buying Circle-K. Timing could be quite good, buying the energy sector where it is. They are sitting on tremendous cash. You get a lot of business from the US and revenue exposure from Europe. It is one of the strongest dividend growers out there. Buyers have bid the price up there. There are a lot more acquisitions that they can do and it will be a core holding for investors. Investors have to pay up. If you can get it below 20 times earnings then great.