Steve Belisle Element Fleet Management EFN-T TOP PICK May 18, 2016

Great ROE, dividend growth model, and free cashflow. Global scale. Fee-based business. Undemanding multiple of 14-15x earnings at most. Super-well managed. Great growth ahead.

Darling amongst investors. Fleet management business very fragmented - expecting further consolidation. Large opportunity for organic growth as well. Balance sheet continues to clean up - expecting free cash flow to increase. Core holding that will continue to own. As business continues to perform - expecting share buybacks. 

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.

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.

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

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. 

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.

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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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.

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.