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Hap (Robert) Sneddon FCSIGrande West Transportation GroupBUS.VBUYJun 15, 2018

Would you be a buyer? When would you take a position? It has really good support, with a lot of buyers. Things are lining up to have a good trade. Resistance around $2.25. Space between price action and current price gives it room to run, especially given the dynamic action in the student transportation sector. If it breaks below $1.25, then there’s something wrong with the thesis. (Analysts’ price target is $2.50.)

Hap (Robert) Sneddon FCSI

Unknown

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$1.49

Stock price when the opinion was issued

$2.42

As of Mar 26, 2021. Market Open.

Transportation

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DON'T BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

Buses may be electric, CNG, or clean diesel and electric buses are offered by the company.
Over the past five years, sales have shrunk by a compounded annual growth rate of 14.5%, while EBITDA and Net income have grown at a CAGR of more than 100% over the past five years. The company is expected to turn profitable in 2024.
While the balance sheet has improved over the year, negative cash flows and EBITDA make it less attractive compared to its peers.
We think some of this is priced in, however, VCM is also expected to grow at multiples of its current sales while slowing growth is expected for others.
There is still a long way to go before the growth materializes, and that's still an 'if' it does.
We would consider the name risky.
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DON'T BUY

Changing its name and listing on the NASDAQ. Not the big salvation that most people think. Not familiar with the company details.

WATCH

They've built a whole new bus category of smaller buses. Move to the US took longer to get all the pieces together, and stock sold off. Wind has come out of the sales of a lot of EVs. Upgrading to the TSX should attract investors. Keep on the radar.

BUY

Recently, they're moving into e-buses which is attracting a lot of interest. BUX has a U.S. plant to exploit the Buy US campaign currently in the States. He recently bought BUS. He expects news headlines to push this higher this year.

WATCH

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The stock has seen an amazing recovery with business picking up. The move into EV was welcomed but the space remains competitive. It is not without risk, and to continue their EV projects, they will need capital. Expectations are high which adds additional risk. Unlock Premium - Try 5i Free

BUY

He did very well this in the past. They make smaller buses, used in less-busy routes, yet are more efficient than comparable vehicles. It took longer to set up and find a partner in the U.S.--and the stock slumped--but they have by now set things up. They're rolling out an e-vehicle--and this is really interesting, as more cities more towards carbon-neutral buses. He recently bought back into this name. Few companies are making e-buses.

DON'T BUY

They did well, but then missed some quarters. (So has NFI-T.) Margins have dropped in the bus space. He exited 18 months ago. Cities may be holding back on bus orders as they decide on whether to buy e-buses or not. There may be pent-up demand.

WAIT

It is one of those names that got a bit ahead of itself. Now there a slowdown in the bidding universe. Wait until the new year.

DON'T BUY

He owned for a short time. They got off to a really good start. What derailed it was the tariff wars with China. They had to shift manufacturing from China into the US. There were few new orders this year.

DON'T BUY

It comes down to contracts and orders. Now is a rebuilding year for them. They have to prove they can be profitable in a low-delivery schedule. Compare them to the larger NFI which has a larger backlog and overall business, though neither is doing well this year.

PAST TOP PICK

(A Top Pick Sep 24/18, Down 66%) The benefitted a lot a few years ago from selling their bus to the Canadian public transit market and the US private market. That bus was durable and fuel-efficient and beating competition; big parts of it are made in China. So, when the US launched the trade war, it hurt BUS-X. BUS has found a US partner now, but this makes the sales cycle much longer. That's why he sold.

PAST TOP PICK

(A Top Pick Jul 25/18, Down 68%) Must be cognizant of where the sector and the business is in their cycle. They've done good things in Canada, but have stumbled in the U.S.. Probably 16-18 months until they ramp up revenues in the states. The American private side, which is much larger than the Canadian public part, it could rise well. Depends on the investment horizon.

PAST TOP PICK

(A Top Pick May 10/18, Down 68%) He still likes it. What happened was BUX got delayed getting the buy-USA certification and faced tariffs because they manufacture components in China then assemble them here. So that's all led to a delay in a ramp-up to the U.S. However, most competitors have exited this sector and customters love their buses. It comes down to things happening later, so wait. When orders ramp up, he will buy more shares. They have twice as many opportunities in the U.S. than Canada.

DON'T BUY

He used to own it. They ended up over promising and under delivering so he exited. Their margins were low. They had some operational issues. Things have not turned around yet.

PAST TOP PICK

(A Top Pick Jun 14/18, Down 65%) They have a great product and he still believes in it. The big disappointment was some delivery delays and some new orders took longer to get. Trade wars with China and 'Buy America' have hurt them. They should look at putting themselves into stronger hands. They have a good product and business model.

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Hap (Robert) Sneddon FCSIGrande West Transportation GroupBUS.VBUYJun 15, 2018

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