Todd JohnsonElement Fleet ManagementEFN.TOHOLDSep 22, 2015

Selloff related to worries about software. Great job turning business around. Look for clues that they're continuing to win contracts in the space, and adding AI solutions to transform offerings.

Challenge recently was extended multiple. Tailwind of adding new contracts, but this occurs over a longer sales cycle. Profitability dropped, earnings weren't accelerating, so it dropped in his rankings.

Great compounder over the years. Small-mid cap. Nice network effect of recurring revenue on its commercial leasing. Profit margins expanding. Growth is there, solid momentum. After recent drawdown, seems to be basing and moving up.

Earnings have been flat. Price has topped out above FMV. Unless there's a catalyst for a substantial increase in earnings, not a compelling buy. "Has given at the office" with a heck of a run, can't expect it to go much further.

Can't see anything specific, but we're seeing a fairly consistent trend in markets where a stock consolidates after making a significant move. That's really positive for the stock longer term, as it builds a base and then goes to the next level.

Business has been doing phenomenally well. Growth in mid-teens to low 20% over last few years, which probably continues for some time. More large companies are farming out fleet management to EFN, and EFN is offering more services (which boosts revenue, much of which is recurring).

He'd say to watch it. If it starts to break down more, then maybe something's changed. But sideways action is often just a case of consolidation.

Not flashy, but keeps essential businesses moving. Makes it a reliable grower in a portfolio. Shift toward higher-margin services is really working. Cashflow remains very healthy -- so it can buy back shares and reinvest in technology without stressing balance sheet. Steady compounder. Likes it.

They delivered another strong quarter: cash flow, steady earnings and managers buying back shares. Are moving into smaller fleets and a new platform involving AI to make fleet management more efficient. Is a steady compounder. Now is a good entry point.

Company based on effective management of auto fleets for corporate accounts. New apps and technology is allowing for better management of business. Recent share price strength good for long term investors - but would wait to buy on weakness. Overall a strong business. 

Good business, but his Canadian portfolio has 15 businesses, so this one just hasn't made the cut on quality and growth. Quite leveraged, earning a narrow spread. Management change. So big, that next step in growth would have to be outside NA to move the needle.

The stock is up 27% in the past year though down a bit since the US election. It reports earnings Feb 26, before the next tariff 'deadline'. So earnings may be the more important factor if buying in the next month. We think $26 would be attractive, barring any other news.
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How could you not like this chart? It's not gone parabolic. Doing a nice little roundover, may pull back a tiny bit more due to market volatility. See where it is compared to the 200-day MA; if it's 15% or more then worry, and if it's under that don't.

Leading fleet manager throughout the globe. Continues to grow towards ~$10 billion market cap. Demand for services within growing tech companies like Amazon. Ability to operate cheaply with high margins - top decile. Built a very strong business that is growing organically. 

It has been in an uptrend which looks a bit steep. If it pulls back to the trend line then buy.

It remains undervalued. Are more into financial services than most banks, so it's less risky. They're the largest operator in North America. They continue to grow their business and manage it efficiently. A great story that gets better.

They have 1.5 million cars on the road, 5,500 clients and 700 different industries. Are market leaders in North America, Australia and New Zealand. Good organic growth and a lean capital structure, driven by recurring earnings. It's done well and he's happy with it.