Jean-Francois Tardif Uni-Select Inc UNS-T TOP PICK Jul 07, 2009

They have looked at in the past, but are not owners. They released weak quarterly earnings and thinks it may take time for the value to be there. He would like to see a couple of good quarterly earnings reports first.

This company grew by rolling up paint suppliers in the US in the auto-finishing business, much like Boyd Automotive except it is a bit upstream, actually supplying the paint in to the shops. The company did well for a while but after they had acquired a big chunk of the industry, their pricing got high. Since then, earnings have been disappointing, their Canadian exposure has been tough with the economy slowing down, and the stock sold off. In addition, the automated driving support features will lead to fewer collisions and hurt the repair business over the longer term. Over the short term, investors could nibble at the stock at this price and then sell it on a bounce. The stock dropped today after the CEO departed abruptly and the company cut its forecast.

A distributor of automotive parts in Canada and in the UK and a US-based paint finishing shop. He bought this in February. It has not done well for him. It has made three bad earns announcements in a row. Last week they announced that the quarter would not be good. They also announced that the CEO was gone, which he sees as good because that CEO would over-promise and under-deliver. Finally, they announced a strategic review of the company, which he believes will lead to sale of one of its businesses, probably the paint finishing business, and this will unlock good value. Yield 1.7%. (Analysts’ price target is $25.64)