Element Fleet Management (EFN.TO)

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.

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. 

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.

Will continue to do well. Is a misunderstood business EFN is the world's largest fleet manager of delivery vehicles (Amazon, P&G); they outsource for these companies. There's little risk in this business. Pays a 2% dividend, trades at 15x PE and 8% free cash flow yield.

He's pretty conservative on the economy. Haven't seen full impact of higher rates. Good performance, but in a riskier space. Don't chase at these levels. Be cautious. Instead, earn 4.8% on your cash for 6 months, see how things go.

Getting up into large cap territory. Economic for companies to outsource to them. 14x earnings. Yield almost 3%.

Really good run. Very good business, with good ROE. He'd wait for a pullback. Not a bargain right now. Recession risk.

EPS of $0.31 beat estimates of $0.27 and revenues of $303.96M beat estimates of $282.22M. Net revenue grew by 16.5% for the quarter and it generated $0.37 of free cash flow per share for the quarter. Its capital-light business model expanded its ROE to 12.0%, and management raised its full-year 2023 guidance for net revenue, operating margin, adjusted operating income, adjusted EPS, free cash flow per share, and originations. It pays a yield close to 2%, has demonstrated strong margin expansion, forward estimates for growth are good, and it trades at a reasonable valuation. It does have a high net debt balance of $9.4B, but these were strong results and the market has reacted positively so far. We would consider the stock buyable at this time while being mindful of position sizing and the company's balance sheet risks.
Unlock Premium - Try 5i Free

Capital light, free cashflowing, cleaner story for investors. Valuation still reasonable. Supply chains easing allows them to deliver on backlog of contracts. Fix up cars, so it's downside protection and inflation-protected. Inflation does eat into some of their margins. Should perform well over the next few years, and valuation should expand. Focused on becoming data-centric to better serve its clients. Global. Yield is 2.27%.

EFN pays a dividend yield of 2.2%, has shown decent growth over the past year, and has a strong profit margin. 
Its valuation is reasonable (6.2X forward P/S and 15.9X forward P/E). 
Its net debt of $8.9B relative to its equity position of $3.7B is somewhat concerning, although the company generates some positive free cash flows. Aside from its somewhat weak balance sheet, its margins and revenue growth look decent, and we would consider the stock buyable at this time while being mindful of position sizing and the company's balance sheet risks.  
Unlock Premium - Try 5i Free

Average investors don't know about company.
Very undervalued company.
Excellent management with good assets.
Fantastic niche position. 
Strong business model going forward.