TFI International Inc (TFII.TO)

(Top Pick Feb 4/2015, Down 17.59%) He still likes the story. They have firmed up margins. We need a little more growth in the economy.

He is a believer in this company. They have done very well in consolidating the “less than truckload” cartridge industry in Canada. Stock took a bit of a hit in the 3^rd quarter like everybody else, but is now coming back a little. Low fuel prices are to their advantage. Thinks there are more acquisitions out there for them.

They sold their waste management division so they could focus on their trucking business which is where they make the bulk of their money. The fact that they sold a distraction and freed up cash makes sense to him as a shareholder. He continues to buy for new clients. 35% revenue in the US and 65% in Canada. It has not done much this year, but he felt the valuation was reasonable. Right now he feels people are just taking profits.

A very well run company and it generates lots of free cash flow. Last year they used half their cash flow to buy back stock. It looks attractive. In ’08 when the economy slowed down they got hit hard, so he worries what will happen in this slowdown. Wait until we know we are not in a recession.

Likes this company, primarily on valuation. ROE is at around 15%. PE of about 16. Beat their last quarter by about 27%. Yield of 2.9%.

A cross-border trucking company, and with gas prices being as low as they are, they will benefit. Also, with the Cdn$ coming down as much is it has, it encourages cross-border shipping to take place. They have been busy doing acquisitions which have put downside pressure on the share price. Attractive valuation. Trading at 15X. Good dividend yield of 2.70%.

Technically this is not looking too good. It is in a downward trend and is underperforming the TSE Composite and currently trading below its 20 day moving average. This is not an attractive opportunity technically. It has long term support at around $22, and we are not too far off of that. Wait for it to test around the $22 level and show signs of bottoming.

They have expanded and done very, very well in terms of their fleet acquisition. He is not all that enthusiastic about transport, particularly in Canada. One of the things that should be positively affecting them is the cost of diesel, which has been a big wind at their back. This has not affected their stock price as much as he had expected. He would want this to be a lot cheaper before he looked at it. Such as 5X EBITDA. Their core operating profit has been out West which is going to get hurt.

Mostly East West business, but some North South. It was sold off because of Alberta and a lack of pickup in manufacturing in Ontario. They acquired a number of companies and have become the premier trucking company in Canada. It is cheap, down about 14% and you can buy it while it is down.

Continues to buy this for new clients. Has pulled back meaningfully from the beginning of the year. They always have a lousy 1^st quarter, weather related. Sees them selling off their waste division and looking to split the company into 2 or 3 parts. That could realize value. Recently got contracts with Google and Amazon for same day delivery in New York and some Canadian cities. Generates a lot of free cash flow, which is being used right now to buy back stock.

This has a pretty good upward trend. Broke a little bit of support recently, but wouldn’t be too concerned until it broke the low of later 2014. Pays a reasonable dividend. Looks like the easy money has been made. Yield of 2.6%.

Transportation actually starts to fall off at this time of year. He would not be stepping into this during the summertime. Transportation will come back in the October time frame. It is actually a possible short in the summertime as it gets quite weak.

(A Top Pick Feb 5/2014. Up 24.93%.) Had a lousy year last year because of bad weather, which provided a couple of opportunities to buy the stock. Last year this was trading at a 10% free cash flow yield. Companies that generate massive free cash flows, provide wonderful opportunities. Still loves this.

On transportation companies, either trucks or rails, there are fuel surcharges. Lower oil prices will stimulate the economy. This company is a very large, diverse trucking firm. One of the growth areas is the packaging/courier business. This company has some partnerships with Google, and he thinks this will grow over time with the continued growth of e-commerce. You also get the benefit of a spin out sometime this year of their truckload business. Over time, they could also sell/dispose of their waste management division. These are key catalysts. Extremely well-run.

This company has been consolidating the “less than truckload” trucking industry. When you buy your competitors, there is always a little question about digesting them and merging the cultures, but over time you should be able to become more efficient and be able to increase your margins. Lower fuel prices are a huge benefit for the trucking companies, not just because of the cost saving, but allowing them to become more competitive with the railways. Dividend yield of 2.34%.