Element Fleet Management (EFN.TO)

The vote on the split is next week and he assumes it will be approved. He does not like the fleet business. Once it has split it may be easier to analyze and he may suddenly get interested. It is already priced reasonably for what it is.

(A Top Pick Oct 1/15. Down 15.82%.) Sold his holdings about a month ago, because he felt the company didn’t execute on some of their promises, in a clear fashion. He liked the leasing side and thought it was a good growth area.

(A Top Pick May 18/16. Down 3.34%.) The split was his thesis for recommending this, but it has not happened yet. He thinks it is going to happen in October, which will be a good catalyst for the stock. When you look at the sum of the part valuations, the fleet side should be trading at a 14 or 15 times multiple. Thinks they could generate $1.20 in earnings next year. BV is about $4 now, and even if you assume a 25% discount to Book, which he doesn’t, you are still at $3, which leads you with a lot of potential valuation in the stock.

The split coming up should unlock some value. They should soon launch their 2^nd investment fund, and if successful that could reassure investors that the business model for the ECN Capital part is working. Also, expects a dividend increase at the end of the year. Small-cap investors might not have been able to buy the stock at this stage, because the market CAP is too high, but after the split, ECN Capital will be eligible for most small-cap investors, and that is how we will see the valuation come back up. Dividend yield of 0.7%.

Very successful emerging leasing leader. After the 08/09 downturn, the historic leasing companies blew up and this company jumped into the void with a very seasoned management team. It has had a pullback on a recent earnings miss. Trading at 8X next year’s earnings. Going to split into 2 pieces, which he thinks could be a catalyst for the stock in the coming year.

Splitting into a fleet side and a finance side. In general, this is a great company, and if he owned he would stay with the fleet side, which is where it is uniquely positioned.

This is going to split at the end of September. Feels it has been going down because people are worried about the interest rate environment and the environment the company is operating in. The company has basically carved out a niche in the finance business that a lot of the banks didn’t want to be in any longer. If this were 15%-20% lower, he would be seriously looking at it. This is one that you could certainly take a good hard look at.

(A Top Pick July 30/15. Down 29.55%.) Sold his holdings recently on the news that they were going to be splitting the company, and how they were going to be allocating costs, etc.

When a company’s business decides to break off, the idea is to unlock value in a part that is being weighed down by the overall picture. It is the fleet management business that is being undervalued. A stock split is different. This is not a splitting of the stock.

They are splitting the company up. He thinks it is undervalued. They are separating their fleet management and equipment financing businesses. They think their fleet management business is not being fairly valued.

This is a company where management pays itself very well. That has been a big red flag for him. This is going to be splitting into 2 parts. There is going to be the fleet business and the non-fleet business. The street seems to be undecided as to how to act with this.

It is a love it or hate it stock. He thinks it is cheap and has huge upside potential. You would be a fool to be scared out of this stock at this time, when you should be buying. It is already down so it should not be down twice on the same news.

(A Top Pick Aug 20/15. Down 26.51%.) Being split into 2 different businesses. He likes the fleet business part which is a good business over the long-term. Still a Buy at these prices.

This has been positioned in a unique line of financing that makes it stand out. The only problem he has is the valuation. As a value investor, he finds it very difficult to pay for future growth without using a fairly severe discount rate on it. You have to take a longer-term view of the stock. This contains a great component of companies in a rather unique area.

An excellent company. It is higher beta, meaning it will move more than the market. The consensus is overwhelmingly positive for it. If you are willing to have some portfolio volatility and look out a year, then he thinks you would be well-suited by buying it. However, if you are looking more for income or want to sleep at night, then you are probably better paying up for things such as grocers, and just staying flat.