Transcontinental Inc. (A)

TCL.A-T

TSE:TCL.A

21.20
0.33 (1.58%)
Transcontinental Inc. is a Canadian newspaper publishing and marketing company based in Montreal, Quebec. The company is a major publisher of community newspapers in Quebec, and previously owned newspapers in Atlantic Canada and Saskatchewan.
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Analysis and Opinions about TCL.A-T

Signal
Opinion
Expert
PAST TOP PICK
PAST TOP PICK
September 27, 2018

(A Top Pick Aug 15/17, Down 5%) It has done really well for several years now, transitioning from the printing space to the packaging space. Most recently they missed on their numbers and it spooked the markets – be patent. It is still really cheap and the dividend is strong. This is a great entry point.

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(A Top Pick Aug 15/17, Down 5%) It has done really well for several years now, transitioning from the printing space to the packaging space. Most recently they missed on their numbers and it spooked the markets – be patent. It is still really cheap and the dividend is strong. This is a great entry point.

WATCH
WATCH
September 20, 2018

It is one he does not own. He has looked at it in detail. On a PE and multiple basis it trades cheap and always has done. Over the long term you will be able to see them pay a few extra pennies with dividend increases. The multiple looks attractive but don't catch the falling knife. Look for a recovery in targets.

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It is one he does not own. He has looked at it in detail. On a PE and multiple basis it trades cheap and always has done. Over the long term you will be able to see them pay a few extra pennies with dividend increases. The multiple looks attractive but don't catch the falling knife. Look for a recovery in targets.

WAIT
WAIT
September 18, 2018

This was historically a printing company that bought up other companies and cut costs by consolidating the business. That game is over now because the newspaper industry has shrunk. They then entered the packaging industries, which was exciting because this put a company with cost-cutting expertise into an industry that still has growth opportunities. They did well for a couple of quarters and then got hit with bad results that have shaken confidence. He thinks it is normal for a few tough quarters after a large acquisition. The price has dropped quite a bit, and it might be a buying opportunity, but he suggests waiting a bit longer to see how well the business is progressing. It would be better to pay another buck or two if the company is doing well than buying now and watching it drop $4 or $5 more if the transition is troubled. He thinks the company is well run and will eventually turn around and be a good investment, but the stock might have to drop farther before that happens. He is looking at this stock to enter, himself. He wants to buy it, but not yet.

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This was historically a printing company that bought up other companies and cut costs by consolidating the business. That game is over now because the newspaper industry has shrunk. They then entered the packaging industries, which was exciting because this put a company with cost-cutting expertise into an industry that still has growth opportunities. They did well for a couple of quarters and then got hit with bad results that have shaken confidence. He thinks it is normal for a few tough quarters after a large acquisition. The price has dropped quite a bit, and it might be a buying opportunity, but he suggests waiting a bit longer to see how well the business is progressing. It would be better to pay another buck or two if the company is doing well than buying now and watching it drop $4 or $5 more if the transition is troubled. He thinks the company is well run and will eventually turn around and be a good investment, but the stock might have to drop farther before that happens. He is looking at this stock to enter, himself. He wants to buy it, but not yet.

BUY WEAKNESS
BUY WEAKNESS
September 10, 2018

Short term they announced some disappointing results. They have been trying to diversify and are getting into packaging. Their strategy makes sense over time. This should be temporary in nature and this is an opportunity to buy some here.

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Short term they announced some disappointing results. They have been trying to diversify and are getting into packaging. Their strategy makes sense over time. This should be temporary in nature and this is an opportunity to buy some here.

BUY WEAKNESS
BUY WEAKNESS
August 23, 2018

They were a paper packaging business that is dying. His hat is off to the team for transitioning it to packaging labels. They have slowly sold off assets from the paper business. He continues to like it although it is not as cheap as it was. It is still fairly cheap, however, at 11 times earnings. Take only a half position to take the rest on weakness. That is what he is doing.

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They were a paper packaging business that is dying. His hat is off to the team for transitioning it to packaging labels. They have slowly sold off assets from the paper business. He continues to like it although it is not as cheap as it was. It is still fairly cheap, however, at 11 times earnings. Take only a half position to take the rest on weakness. That is what he is doing.

TOP PICK
TOP PICK
July 25, 2018

A big turnaround story that continues to grow by acquisition. In a competitive space, but they're innovative and they create synergies from their purchases. They've gone from printing to packaging which will grow. (Analysts' price target: $31.94)

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A big turnaround story that continues to grow by acquisition. In a competitive space, but they're innovative and they create synergies from their purchases. They've gone from printing to packaging which will grow. (Analysts' price target: $31.94)

TOP PICK
TOP PICK
May 24, 2018

Over the last few years they have been picking away at small acquisitions. They were building an expertise in the industry. Then they made a large acquisition and vaulted themselves into the top ten in North America in their space. It is still being priced as a printing company. He does not think they are done with this transition and are not getting recognized by the market. (Analysts’ target: $30.88).

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Over the last few years they have been picking away at small acquisitions. They were building an expertise in the industry. Then they made a large acquisition and vaulted themselves into the top ten in North America in their space. It is still being priced as a printing company. He does not think they are done with this transition and are not getting recognized by the market. (Analysts’ target: $30.88).

BUY
BUY
May 17, 2018

They have done a great job of transitioning away from paper into packaging, which has been insulated from a transition to a digital world. They made some good acquisitions. It is trading at 11 times only because it was cheaper a year ago.

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They have done a great job of transitioning away from paper into packaging, which has been insulated from a transition to a digital world. They made some good acquisitions. It is trading at 11 times only because it was cheaper a year ago.

WATCH
WATCH
May 9, 2018

He once owned it. Printing, a major segment of theirs, is in secular decline, but they've seen good growth in packaging after making an acquisition. Trades at a low multiple. It's a stock worth looking at. Could be value here.

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He once owned it. Printing, a major segment of theirs, is in secular decline, but they've seen good growth in packaging after making an acquisition. Trades at a low multiple. It's a stock worth looking at. Could be value here.

DON'T BUY
DON'T BUY
April 25, 2018

He has a model price of $45.65 – 70% above current levels. This never trades where the fundamental value of the company is. It is near the upper range of historical value. He would look elsewhere.

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He has a model price of $45.65 – 70% above current levels. This never trades where the fundamental value of the company is. It is near the upper range of historical value. He would look elsewhere.

TOP PICK
TOP PICK
April 5, 2018

It has become more topical recently. They are in commercial print and are a consolidator. They are good at generating cash flow from what has been a declining business. 8 times PE. They are using the cash flow wisely to acquire. About 48% of their business is packaging. Their equity issue was not completely sold, but has since it was issued. (Analysts’ target: $30.20).

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It has become more topical recently. They are in commercial print and are a consolidator. They are good at generating cash flow from what has been a declining business. 8 times PE. They are using the cash flow wisely to acquire. About 48% of their business is packaging. Their equity issue was not completely sold, but has since it was issued. (Analysts’ target: $30.20).

WATCH
WATCH
March 27, 2018

Extremely well managed. They are great allocators of capital. They are migrating the company out of printing and into packaging. They have to make some acquisitions. The multiples in packaging are expensive. It’s not clear whether they can grow it well. He suggests waiting until it’s clear how well they are doing with the packaging business before buying the stock.

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Extremely well managed. They are great allocators of capital. They are migrating the company out of printing and into packaging. They have to make some acquisitions. The multiples in packaging are expensive. It’s not clear whether they can grow it well. He suggests waiting until it’s clear how well they are doing with the packaging business before buying the stock.

BUY
BUY
March 20, 2018

One of the best-managed Canadian companies over 15-20 years. Have downsized well. They know their business, and doesn't see anything stopping them. The stock is close to a new high.

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One of the best-managed Canadian companies over 15-20 years. Have downsized well. They know their business, and doesn't see anything stopping them. The stock is close to a new high.

COMMENT
COMMENT
January 10, 2018

Given the value this is trading at, he doesn't view it as risky. You are not overpaying, and you are pricing in some of that transition risk which is there. It’s trading at around 9X PE with a yield of about 3.25%. A very good valuation and you are getting paid a healthy dividend. Historically, this has been a printing focused business, which is dying, but the company has done an exceptional job of transitioning to the food labelling and labelling as a whole. He is still buying for new clients.

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Given the value this is trading at, he doesn't view it as risky. You are not overpaying, and you are pricing in some of that transition risk which is there. It’s trading at around 9X PE with a yield of about 3.25%. A very good valuation and you are getting paid a healthy dividend. Historically, this has been a printing focused business, which is dying, but the company has done an exceptional job of transitioning to the food labelling and labelling as a whole. He is still buying for new clients.

DON'T BUY
DON'T BUY
January 4, 2018

They are the last printer standing. The industry has fallen on hard times. You don’t get as much paper in phone books, fliers and news papers any more. It is a no growth business. Yet this company has managed to persist as their competitors have gone away. It does not mean, however, that they have a great future going for them.

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They are the last printer standing. The industry has fallen on hard times. You don’t get as much paper in phone books, fliers and news papers any more. It is a no growth business. Yet this company has managed to persist as their competitors have gone away. It does not mean, however, that they have a great future going for them.

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