Element Fleet Management (EFN.TO)

This has expanded through a fairly aggressive acquisition policy. He is an admirer of the company and management. Hasn’t owned because multiples have been out of his range. It is now pulling back and getting closer to areas where he would consider it. There were rumours today that they were going to sell off a portion of their assets to Bank of Nova Scotia (BNS-T). If they did, that would be a signal they are sort of refocusing their lines and being a little more disciplined in choosing the areas that they strategically want to expand in. Still out of his price range.

A leasing company, but more of a fleet management company. Did a big acquisition of GE’s fleet management business. Trading at 11X earnings and will be paying a dividend in 2016. They rate a BBB with DBRS, which means they can fund themselves a lot cheaper. Thinks there is good organic growth coming along with small tuck-in acquisitions. Dividend yield of 0.60%.

Ranks 648 in his quant model, so it is in the basement. Earnings are expected to grow from $1.02 in 2015 to $1.61 giving a 10.6 PE and a .2 PE to growth. Next year earnings are expected to grow by 22%. Looks like a reasonable opportunity, but because it doesn’t fit all the characteristics of his quant model, it is not a stock in his portfolio.

This is up today, largely with all the financials doing well given the rate announcement from the Fed. It is an outstanding company and an excellent name.

They are in the leasing business. Profitability depends on the slope of the yield curve. There is a challenge here and you must diversify. There is support from $13-$15 and we should see support in that range. You could start nibbling here, but upside will be limited.

Excellent management team. PE of 15 times. They are now the largest fleet leasing company in North America. 68% of their assets are in the US.

Model price is $20.22. He sees this pulling back to around $15.17, certainly in this Canadian market selloff. He would be a buyer at $15.20. This is getting tougher and tougher because the balance sheet is getting so big compared to where the earnings are.

Financials as a sector are good cash generating businesses but you want to pick your spots. They are the North American leader in fleets. They just instituted their first dividend.

This is a way to have non-bank exposure in Canada and not have exposure to the housing market. Management has done an incredibly good job and have made 2 major acquisitions, including the GE fleet business. It’s very early days in terms of integration. Company is trading at around 10X forward earnings, which looks pretty cheap compared to the banks. It is growing faster than the banks. Expect the dividend will continue to grow. Dividend yield of 0.58%.

They are a leasing company. They purchased a lot of GE-T’s assets. 11 times earnings. There is some growth by acquisition opportunity also.

This company started growing and bought out some GE assets and some Trinity assets and then started to pay out their 1^st dividend. This is a fabulous sign of confidence from the Board of Directors and management. Business conditions are very good. A lot of people may be concerned about higher rates, but as long as interest rates don’t spike up and they are able to maintain that spread, it is not a big problem. A really, really good non-bank financial company.

(A Top Pick Nov 25/14. Up 18.56%.) This is going to grow largely through earnings, rather than multiple expansion. There is always the possibility for acquisitions. Has a fair exposure to the US. This is a company that is in the right place at the right time.

A leasing company, but the biggest part of their leasing is fleet leasing. Made a huge acquisition from GE (GE-T). They will be selling off some non-core assets in New Zealand, Australia and Mexico, and will be keeping their US and Canadian holdings. Feels there is some really strong potential over the next little while. There are hopes that this company will pay a dividend in 2016.

Recently made 2 acquisitions, and both are focuses on partially moving from Canada to the US. This is really a fleet management story with anything from aircraft to trucks to rail cars. They can outsource the leasing side of things, but it is also the incremental services from repairs or logistics, a tack-on fee, that they keep getting every single time. This has a more conservative balance sheet which he views as a positive.

A fleet leasing company. It is a good opportunity to buy here. He thinks they will be paying a dividend over the next 6 months to a year. There is a really great story here. He thinks you will see good growth.