Fabrice Taylor Rocky Mountain Dealerships RME-T COMMENT Feb 21, 2013

This has really come off nicely from the lows of a few years ago. This coincides with the cyclicality of the oil price, and it is based in Alberta, but it is an agriculture company, so a lot of their sales decline and inventory problems that they’ve had over the last few years have come from a huge cycle of buying and inventory buildup that happened in the 2012-2014 period. We are starting to see signs of that rolling off. Last year was a very long harvest, so equipment might need to be replaced. Trading at about 8.5X earnings, 5X EBITDA. They do very accretive acquisitions, and the balance sheet is in reasonable shape. Dividend yield of 4.57%. (Analysts’ price target is $10.82.)

Had a Pairs trade with Service, and was Short it in the fall, largely because the company’s Q2 numbers were off the charts compared to the industry. It worked out well for him. As a Long position he thinks it is a good company, but if he had a choice, he would probably take Cervus (CERV-T).

Basically sells and leases agricultural and industrial equipment, particularly in Western Canada. Their next report will be March 2018, and earnings are expected to grow by 69%. 3.7% yield and 35% payout. Dividend yield of 3.7%. (Analysts’ price target is $14.)

They had trouble a few years ago and sorted them out. They have a dividend as well. The industry is solid and stable and the company has turned around, solving their problems. He thinks there is upside to come. (Analysts’ target: $14.00).

(A Top Pick Jan 12/17, Up 44%) Case farm equipment. They picked up sales and the price moved up. If they continue to execute the way they have he will continue to hold it. They announced an acquisition in the US.

He thinks there is still good opportunity for the company. Sales are up 7%, earnings are up 23%, earnings estimates have gone up. The stock trades at a good multiple of EBITDA to Earnings Growth of 0.65. He sees this as similar to PEG, and considers anything less than 1 as good.

He likes the insider buy in. 22% owned by insiders. 13% dividend growth over the last 5 years. Earnings momentum has been pretty good. They did not increase the dividend so they could look at opportunities. (Analysts’ target: $15.60).

(A Past Top Pick on January 12, 2017, Up 29%) Last year was a great harvest and they've had good last few quarters, but the recent winter is a headwind--could be a slow start this year. It's still a cheap stock. Managment may acquire in the States; they have the cash. This could happen in the next 6-12 months and may be a catalyst for the stock to go up. Dividend yield of 3.7%.