ZCL Composites Inc. (ZCL.TO)

One of his favourites. They stand to benefit from a steady refresh cycle of tanks in gas stations around North America. He believes they will pay a special dividend in Q1.

(Market Call Minute.) It has gone up a lot in the last little while, and he would want to see it check back before he bought it.

Manufactures reinforced plastic underground tanks, mostly for gasoline and mostly under service stations. A big play on retail. They have about 85% of the market in Canada, and 50% in the US. Has $180 million in sales. Water is also a nice growth area with their ability to store, restore and recycle. Most of the retail gas tanks are steel from the 1980s, with a 30-year warranty, which are now coming to an end. Insurers and financiers are not too keen about the new steel tanks, and they have dropped to about 15% of the market. Dividend yield of 2.86%.

(A Top Pick May 31/16. Up 30.61%.) Still likes this. This is a company that is getting re-rated in terms of valuation. It was always way too cheap. It sells storage tanks for gas stations that are made out of fiberglass. Still thinks there is upside. They have no debt on their balance sheet.

This is sitting at new all-time highs, which he likes to see. They do underground liquid storage. In the past, they have increased the dividend and paid a special dividend. In the upcoming quarter, you might see a bit of volatility, but in the quarters after you should see an expansion in margins because they are dropping a business line that was losing money. Two quarters out this will be fine.

(A Top Pick July 26/16. Up 16.74%.) Manufactures gasoline storage tanks with a special component for under gas stations. Normally stainless steel is used, but has much higher maintenance. This has a pretty good economic model as there is not much competition. It has a big growth potential and he still likes it.

(Top Pick July 5/16, Up 12.94%) He trimmed a little bit. It is a great story and he would buy more if it got a little cheaper.

He really likes this business. They got hammered pretty hard in the downturn in some of their business lines that were involved in the energy patch. This has a competitive advantage. They are 1 of 2 below ground storage tank providers in North America. That is a great competitive position. There are nice demographics in that there are Costco’s, Canadian Tires and Loblaw’s that want fuel now.

Storage tanks from a plastic or composite material. They don’t rust or corrode. With the Oil space downturn there has been less capital spending. As spending improves, this one should do better.

Manufactures fiberglass reinforced plastics used in storage tanks underneath gas stations. Most of the existing ones are concrete or steel, which requires a lot of maintenance, whereas fiberglass lasts a lot longer. There is not much competition as well as a high barrier to entry. This has a good long runway. Dividend yield of 3.56%.

People sold it off because they misunderstood its energy exposure. They make storage containers for gas stations. They have a sustainable growth story.

Largest manufacturer of fiberglass storage tanks for the petroleum industry, mostly into the retail gas station network. Basically a molding business so there is not a lot of sustaining CapX there, so the free cash flow is very high. They will generate $1 of free cash flow this year. Reasonably cheap. Dividend yield of 3.56%, and this is going to keep going up.

A well-run, shareholder friendly company. Manufactures fiberglass tanks for gas stations, which used to be made out of steel, so there is a replacement cycle. They have over 50% market share. Dividend yield of 3.56%.

An environmental play. They sell fiberglass tanks to the petroleum storage industries, specifically gas stations. There is no debt on the balance sheet. They are generating so much cash that they have to pay a special distribution this year. Dividend yield of 3.68%.

Manufactures fiberglass for storage tanks. People think these are mostly for industrial oil and industrial energy, but actually where the storage tanks are used the most are in retail gas stations. Dividend yield of 3.93%.