Element Fleet Management (EFN.TO)

(A Top Pick Feb 10/14. Up 11.33%.) Has done all right this year. Thinks they are on the verge of hitting an acceleration in earnings growth over the next 2 years. Has taken his position down a little, as he is a little worried about the railcar business where there could be a bit of a slowdown. A lot of that is related to energy and the movement of oil and coal. This could slow down a little bit. Still a good story.

(Top Pick Feb 6/14, Up 6.92%) Never seen demand stronger. Moving in where GE is pulling out. Stock has not done better because the leasing sector trade at the low multiple. We have to rely on the continuing share price increases.

(A Top Pick Dec 16/13. Down 0.64%.) Have actually done just about everything they said and made acquisitions of US railcar and helicopter leasing companies. The earnings have grown and it looks like they are going to grow again next year. Stock has been choppy. Quarters have been okay, but not good, and then it gets soft again. He thinks it will reach his $17-$18 target. (Had almost picked this again.)

Equipment leasing. In a growing and underserved area of the market. He expects to see growth in this market. You can see earnings per share growing at roughly 80% per annum for the next year or so. This will benefit from an eventual recovery in spending on machinery and equipment. A “screaming buy” right now.

(A Top Pick Feb 10/14. Up 11.09%.) Has taken profits on this earlier in the year and is looking to add it back. Likes what management is doing on a longer-term basis. This is a leasing business, which is a very low margin business, but they lever them up. As they start to lever it up they’re going to see better earnings growth. Could be volatile.

This is a non-bank financial which provides some diversification. Their earnings were great, slow and steady. On a valuation basis, it is cheaper than its peers, but also the growth rate is higher than the earnings multiple, which is always a great sign when you can buy something for less than what it is growing at. Balance sheet is in great shape.

Another dismal looking stock chart. The business model is bang on. A great balance sheet and a really good pipeline. Likes the company a lot.

Great story. Doesn't hold, but one of the ones that are at the top of his radar. Looks interesting where it is trading. Made some big deals. He likes companies that make transformational deals where the market is not giving credit. Analysts’ estimates revisions have been very high. A little higher on evaluation side than where he wants to be, so hasn't pulled the trigger yet.

This one makes him a little bit nervous in terms of valuation and the rate at which they acquire businesses and the kind they acquire. At this stage in the cycle, this is not one that he would be an owner of. Generally speaking, as the economic cycle goes longer and longer, investors should lighten up on financials. Some day, when things go bad, financials will lead us into it.

It is a good long term story. Valuation got ahead of itself a while ago. But they continue to do acquisitions and the business model is working. With a pullback in the market, this one would get hit hard because they depend on the capital markets for funding.

(Top Feb 06/13, Up 10.42%) They are doing everything they said they would. They are exceeding their guidance.

He has a policy that if he has been burned by management in the past, he tends to stay away from those companies. It has done well. This is a bit of a roll up strategy, where they keep buying in smaller leasing companies. Easy money has been made in this and growth prospects are fairly muted from this point on.

Has been growing extremely well, static just recently. They added on subsidiaries at a massive pace. If there is a negative it is that the sector is getting a bit crowded.

(Market Call Minute) It is an acquisition story. You are paying for some of that acquisition growth.

This leasing function is very attractive and he thinks it will go higher.