Element Fleet Management (EFN.TO)

Acquired this when they did a big financing recently, and he feels quite positive about it. Their most recent acquisition of a large US fleet, will defer their taxes for a good 10 years or so. Strong management team. Lots of integration opportunities. Expects there will be a credit upgrade, and this will be the fastest growing financial in Canada in 20150-2016. Trading at around 12X forward earnings, good value for a company that will grow as quickly as it will. $18-$20 in 18 months.

CEO is executing very well, and the company just continues to grow. $4 billion company now, and he wants to get it to $20 billion. Continuing to look for acquisitions. Thinks they got a very good price for the PHH leasing business, and feels it will be highly accretive. Once this deal goes through the market, he thinks you will see $15-$16 pretty quickly.

Was in this briefly. Thinks this is a good time to buy the stock. Banks have effectively abandoned the small/medium sized asset market. There are good earnings there. This is a growth stock and you are getting it pretty cheap. His preference is to own financials that are credit exposed to the US market.

Likes it. They really transformed themselves by making sizeable acquisitions to be a leading leasing company in North America.

He has a few concerns with this growing so fast, and throwing a lot of stuff into the pot really quickly. Looking at analysts’ reports, current year’s earnings are always quite modest, and a year or 2 out earnings start to lift. A little concerned that the stock is ahead of itself. Because they do a lot of financing, a lot of the analysts are promotional on it. Over promoted and being pushed too hard.

This is a high flyer and volatile. If you are a nervous investor and you want yield, this is not your stock. Growing its leasing business. Not for everyone.

Just acquired PHH’s North American fleet management business. This is an excellent acquisition, and over the coming years they are going to be able to take some costs out, and run it in a more efficient manner.

There was a big financing on a big US leasing deal, which now has to be digested. This is accretive by 10%-15% so this takes his one-year target closer to $18. Looks relatively cheap on forward earnings.

Have built it up as the dominant leasing company in North America for trucks, rail cars and office equipment. Just did a gang buster acquisition of a US firm. They create tremendous value for shareholders. They should do very well here. There are three preferred share 5 year rate resets if you want yield. Buy equity for growth.

(A Top Pick Feb 6/14. Up 2.87%.) Taking advantage of what happened in 2008 when a lot of US industrial companies deferred or stopped purchases of new equipment. There is a lot of new equipment being purchased and leased now and, at the same time, a lot of companies that were doing the leasing have either retreated or downsized. Made a big acquisition and about 75% of the financing was considered to be equity. Yield of 0.29%.

She is looking at this. They have grown quickly. Growth is by acquisition, and they just made a $1.4 billion acquisition of an auto leasing firm.

Likes it here still. They are well diversified. They have been growing and levering up the balance sheet more. Some of the weakness recently is from the rumour that they are going to make a huge acquisition soon. Likes it as a longer term play.

It is a financial company and must use a lot of leverage to expand its earnings base. Now they have to show earnings growth. It is hard to show organic growth when you are making so many acquisitions. Now they have to prove themselves. He has been looking at it, but it is frothy and expensive.

A leasing company. All kinds of infrastructure with the latest thing being rail cars. There is a lot of ramp-up that they can do and acquisitions they can make over the next 4, 5, 6 years. This business is usually levered. The balance sheet is levered from a traditional business, but still at about half of what they could do. He can see $17-$18 in a year.

It’s an expensive stock and volatile. Has been a great mover in the last couple of years. The story is still intact. He likes the game plan and is comfortable they can execute in it.