New Flyer Industries Inc. (NFI.TO)

(A Top Pick Oct 24/14. Up 127.55%.) A bus manufacturer, so on the theme of who benefits from a low Cdn$ in a strong US economy, this is a great example. There is still upside in the name. Recently made an acquisition of Motor Coach Industries, which really got the stock moving. Management has fixed up a bunch of their plants, have created all sorts of efficiencies, increased margins and have gone into they parts reselling business. Thinks there is a large synergy opportunity here. Also, the US just put through a new act that gives US municipalities a whole bunch of money to spend on buses.

Manufactures bus frames. A lot of municipalities, particularly in the US, have dragged their heels on replacing their fleets. The company also got into the placement parts business, which have huge margins. This fits exactly what he is looking for; a company with a really good underlying growth and a decent dividend at 2.6%. Earnings are expected to grow by 60% in 2016. ROE is 19%. Thinks there is a lot more to come.

It had a bump with a contract win lately. It is pretty fully valued. You need another big contract or acquisition to drive it further. If it pulled back substantially, you would want to buy it.

This is a bus company that actually delivers the buses. It has very good margins, a lot of new contracts up for grabs, margins have been strong and it seems to be capable of getting to new highs.

(A Top Pick Nov 21/14. Up 94.33%.) Their recent acquisition is a transformational one. It is going to increase their size substantially.

(A Top Pick Oct 24/14. Up 101.49%.) He still likes the stock and has been adding to it. They are making a lot more money off of their buses; $36,000 per bus versus $16,000 a few years ago. The largest city bus manufacturer in North America, and now owns Motor Coach as well. Thinks it grinds higher here and gets closer to $30 in the next few years.

Surged to a record high today on their acquisition. The company have consolidated the business and got a lot more efficient as well as getting a lot more orders. Today’s acquisition is a diversification. It also adds some cyclicality to the business. He would watch the debt load with an interest rate rise coming. You need to see how they execute and if they pay down some debt before you get in. At these levels you would be chasing it.

Has been a Top Pick in the not too distant past. He has a healthy position. It is an industry that has consolidated and they are diversifying into the parts business. He likes them longer term. He would not be enthusiastic at these prices, but he is not ready to sell yet.

(Top Pick Oct 24/14, Up 52.78%) A beneficiary of selling into the US. Municipalities in the US are wealthier now and are buying more business. They also got into the after parts business so they get more consistent revenue growth. He continues to like it.

They are doing very well. They build buses, and this is an era where the municipalities, particularly in the US, have a little more money to spend on their transportation systems. They build a very good product and have a good order backlog.

The stock is up a lot, so if you own, he would recommend taking a bit off the table. In a choppy market it is never bad to take some profits. The fundamentals are quite strong right now. While they are a Canadian manufacturer, most of their sales are into the US and they benefit from a stronger US$. Their most recent quarter and the results were very strong and the backlog was extremely strong as well.

This has appreciated quite a bit very quickly. He would not be chasing it at these prices. He is content to Hold, although it is fairly fully valued. Not only are they expanding in their parts and service business, but we have seen the bus manufacturing industry greatly rationalizing at a time when the need for heavy-duty buses has been going up. They are in a good spot at a good time.

Stock is getting fully valued. He just trimmed a little in the last couple of weeks to rebalance his holdings. Still a very bright future. Multiples had gotten up at around the 19X area, but their order backlog continues to grow.

They are a bus building company. He has been in this stock for a couple of years. It has been great. Recent news has led him to believe that there is still some upside. He has been buying more. He thinks it is attractive. It is multi-government funded. Buses are old and have to be replaced. Estimate P/E is 17.07, dividend is .05, Yield is 3.33%. The industry has consolidated from five big payers to three since the last recession.

His conservative dividend model ranks this company with a 3.7% yield and a 7% free cash flow yield in the top 5% of his database. They seem to have some pretty good opportunity for growth. Earnings are expected to go from $1.12 in $2015 to $1.31 in 2016. The overall outlook is pretty good. Earnings growth was up from $.11 to $.35, almost a triple. The coming quarter should be $.30 compared to $.21. Looks like a pretty good opportunity to make some decent money.