Grande West Transportation Group (BUS.V)

Their specialty is smaller 30-foot buses instead of a typical 40-foot bus. Has a smaller turning circle and is less expensive. They are creative in getting lower costs in manufacturing. Bought a frame from China, but ended up adding a bunch of US parts to get a “Made in USA” certification. Earnings are expected to almost triple from $.05 in 2017 to $.15 in 2018, relatively expensive, compared to the stock price. Analysts are predicting $.24 for 2019, giving a more reasonable 10X PE multiple. Thinks there is very good growth for them as well as their competitor, New Flyer (NFI-T).

They’ve executed very well. He guesses that if they come through with earnings and revenue surprises, the stock will pop. If looking for an earlier-stage version, there is one called GreenPower Motor Company (GPV-X) which makes electric buses. Both are interesting. Feels the bus business is a growth industry.

He took the majority of a recent financing. They are just starting to ramp up and are now earnings positive. Their backlog should keep them busy for the next couple of quarters.

Basically all the action this year is base building. There is probably going to be some resistance at around $3 up to $3.50. Chart shows a long base that it broke out of in 2016. You can look at the chart as being a bull flag. You are probably looking at something just south of $4-$4.05.

The stock ran up and made a nice move in anticipation of everything happening, and now it is sort of execution for the management team. The stock pulled back giving it a really attractive entry point. They are now aggressively moving into the US with their US partner taking bus orders and starting to sell. There is also lots of room for growth in Canada. The US has 2 markets, municipalities and the private market for rental car, transportation at the airport, etc. Management guides towards 200 buses out the door this year and 300 for next year. (Analysts’ price target is $3.83.)

They have a shorter bus and that is their advantage. It is less expensive, more efficient and has a shorter turning radius. He Has NFI-T. The PE to growth is reasonable. It will do well over the next few years.

He likes the company, more this week than the week before. This quarter they came out with their first profit ever. Now they can move their backlog through the revenue stream. The execution risk is [almost] over. Municipalities have money to refresh their fleets.

This makes 27.5, 30 and 32-foot buses, which are more efficient than running 40-foot buses on the same route. Traction has really started to gain in Canada. They’ve delivered 44 buses this year and said they are going to deliver 200, so production is going to have to be cranked up. He thinks they will get there. They just had an update and said earnings are going to be positive. They have a deal with a company out of the US that does manufacturing, so they have their “Buy America” certification now, which will help them get into the transit authorities. This could be a takeout candidate.

It went parabolic in 2016-2017, which is usually a pretty good sign that it is overbought. Now, it is consolidating showing a flag or triangle formation, which is a good thing. It shows that it is taking out the excess of that parabolic crease, a move that it did. It will probably break out to the upside, but you have to watch and wait. If it breaks out to the downside, that is bad news.

Manufactures buses that are slightly smaller than a regular bus, as well as costing less. They have a huge backlog. A niche product because of the shorter turning radius, less expensive, and qualifies for “made in the US”. There are good opportunities both in Canada and the US. Earnings growth is expected to go from $.05 in 2017 to $.15 in 2018 against a stock price of $2.63, which gives you about an 18X PE multiple. Expects you would be happy with this investment.

Pretty cynical about this stock. It is a Canadian designed mini bus for public transportation. But it was manufactured in China. If he had a choice between buying and selling he would sell.

This has smaller sized buses that are more suitable in many cases for city transportation, and more flexible. A lot of manufacturing is done in China so prices are more reasonable than some of their competition. There is a big untapped market they can continue to attack, especially with their US facilities and partnerships. More orders are coming in and that is going to drive a lot of growth.

They had all these bus orders for Canadian customers. They were getting trials and then huge orders. Now they are doing the same thing in the US. They provide smaller transit busses. (Analysts’ target: $3.83).

This has been winning all sorts of contracts, and the stock has acted accordingly. They have all these contracts they are working on, and now have to execute on those orders and prove to investors they can make as much money as investors are expecting. Thinks this is viable, but there are higher risks right now because it has gone through the ramp up, and is now in the execution phase.

He really likes the story. Their backlog for 2018 looks very strong, and the stock has moved up quite a bit. They just have to execute on all their orders, and you will be able to see how they do over the next several quarters.