Peter Hodson Parkland Fuel Corp PKI-T COMMENT Nov 18, 2024

Correction for most of this year, gave back over half of its previous move and that's pretty significant. Started to pick up in last week or so, looks as though it wants to break out of a downtrend. Ideally, want to see it get above $40.

He has owned it. It's volatile, making tops and bottoms with breakdowns. It's now basing, which is good; maybe this will break above $36. Wait and see.

Sounds counterintuitive, but WFG and trees are going to be beneficiaries. US still needs them, just going to pay higher prices.

GRT.UN is a good name. PKI works well here. Materials sector, with a name like NTR. 

There's even a part of the TSX that does well with a falling CAD, as earnings get amplified.

(Note the short timeframe.) Trying to find a floor here. Part of his broader energy call.

Should work regardless of tariffs. It's being pushed to unlock value. A few $$ to be earned from low-hanging fruit. Market sees EPS growing 15% over next 2 years, trading at 9x. Idiosyncratic name, not tethered to news headlines, with a nice dividend. Yield is 3.8%.

A big shareholder is agitating for change, wanting management to enhance value. World-class assets. It's cheap.  Refining margins have been coming in and general malaise in economy may explain share price. Very undervalued and value will be realized somehow. Debt, but a lot of FCF. Yield is 3.96%.

The controlling shareholder wants to sell the gas stations and keep the refineries where the margins are higher and sit on lots of real estate. He doesn't own the shares, but the bonds which pay 6% during falling interest rates. Not investment-grade bonds, so the leverage is high.

Bowing to pressure, the CEO has stepped down, adding to uncertainty. The company also lowered guidance, which is not overly surprising, really, considering the economic situation unfolding. The CEO change should appease Simpson and other funds somewhat, but likely only a bit. There is still a strategic review ongoing. Certainly a sale is one possibility. There are a lot of moving parts here. The stock has held up well, likely due to speculation on its future. We would not see it as a great purchase right now, as it would essentially be a 'bet' on a takeover in a very uncertain market, and not really our type of play. 
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Not doing as well as ATD on gas stations and growth, so there was pressure to change things up. PKI's credit rating is BB, while Sunoco's is BB High; so if you own, you should probably sell, rather than waiting to see what happens down the road. If deal fails, stock price will fall into low $30s.