Park Lawn Corp (PLC.TO) Buy, Sell or Hold

Park Lawn Corp (PLC.TO)

26.48

-0.01 (0.04%)

as of Aug 12, 2024, 8:00:00 pm Market Open.

161 watching

BUY

Managers are doing a great job, making big acquisition then doing tuck-ins. They aim for $100 million in EBITDA next year, though $90 million is likely. It trades at over 12x enterprise value and 22x PE. They grow well by acquisition and organically. Good capital allocators. Likely a US player will take them out one day.

BUY

A great business you can hold long term. His mistake was in not seeing the benefit in the transition in the management team. He missed his chance in loading up on this. Great demographics, stable and they grow by acquisition. When the market does well, they invest from their reserves. Despite the recent upward move, this will still pay off down the line.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Earnings rose 120% at $0.35 per share. It beat estimates by 8 cents. Revenue also rose 35%, beating estimates of 7%. A record quarter for them. Acquisitions are being well integrated. The stock has done well and good growth is expected for the next two years. Unlock Premium - Try 5i Free

BUY ON WEAKNESS

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Good growth is expected in the next couple years. Acquisitions may be in the cards. Could wait for a bit of a pullback to enter. Not the type of stock that will spike up suddenly. Has missed 6 out of 8 quarters so an opportunity may present itself. Unlock Premium - Try 5i Free

BUY

He's surprised how well it's held up. Cemetery plots sales were pressured during the lockdown and limitations to social gathering also pressured. That said, it's still doing well. U.S. managers know their business. There's more industry consolidation ahead. Valuation is a little high, though. There's little competition especially in Canada. He's in for the long haul.

BUY

It's a consolidation story in a fragmented industry full of small funeral homes. PLC is stable and has executed well with acquisitions in the U.S. in recent year. This should continue. PLC is conservatively financed, relying little on debt to buy other companies.

DON'T BUY

Pays a 2% dividend yield with 4% free cash flow. Earnings to grow 5% this year, and 32% in 2021. Currently, the stock isn't doing much. You can hang onto it for a year, but don't buy.

WAIT

Wait until Q2 results to see the COVID impact. Will government restrictions be lifted around funerals later? Laws will vary by state. Aging demographics will benefit them though. There will be some softness, but overall they will be fine. Are good operators.

PAST TOP PICK

(A Top Pick Apr 04/19, Down 12%) Earnings number missed just as COVID hit. He got stopped out of it and will probably re-enter at some point. Management did a great job of growing by acquisition. It is difficult right now to sell cemetery plots face to face.

HOLD

It had a pretty dramatic drop from where the stock was. You are seeing some delays in funeral services taking place. Their expansion into the US is very positive. He thinks they are in good shape once we get back to having gatherings. They can withstand any downturn from a financial point of view.

PAST TOP PICK

(A Top Pick Mar 29/19, Up 1%) News of their CEO leaving has hurt the stock recently. It does not expect any skeletons are in the closet. This aggregator of funeral homes and cemeteries will see slow and steady growth with a decent dividend.

HOLD

In the funeral space, they have done a good job diversifying into the US and how to integrate acquisitions. You could hold for the long term. The management team is aware how to build the business in a patient way. All things firing here.

HOLD

A great company and he is not surprised by yesterday's weakness. The company is in a very good space and is well run. Management has got the balance sheet in great balance. There is room to acquire and they have begun to move into the US. He expects the recent price action is short term profit taking.

COMMENT

A growth by acquisition story. There is a pipeline as there are many mom and pop's cemetaries. They have been successful at doing it. He missed it.

WEAK BUY

They buy mom and pop funeral homes and rolling this up. This just made their biggest acquisition and did an equity raise. He likes this, but he's cautious of any acqusition story at the end of a cycle. This is decent long-term.

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Park Lawn Corp (PLC.TO)