Alimentation Couche-Tard (B)

ATD.B-T

(A Top Pick Dec 04/18, Up 18%) The gift that keeps giving to shareholders. A great business model and will surprise 7-11 among convenience stores. Management integrates acquisitions well which should continue. He remains confident with it.

You should be concerned about electric vehicles if ATD.B-T will be a long term hold. Electric cars can be charged at home whereas there is no choice as to where to take an internal combustion engine. They are watching Norway which is the leader in electric vehicle adoption.

A great Canadian story. They do tuck in acquisitions and have handled debt very well. Second only to 711 in the convenience store space. Going forward, we will still need fueling stations (gasoline, electric, etc.) and they are well positioned. Yield 0.62% (Analysts’ price target is $45.59)

What happens to this in a recession? He likes it. It wouldn't do too badly in a recession. Good to enter it now for the long term.

Bought it in 2015. A great company that consistently grows its dividend 25% annually. Long-term, great. You can get in now.

$48.53 is his model price. Better to buy now than in May/June. Likes it.

A long-term hold? Great for long term. ATD is definitely on his list. If there's more rotation out of staples, then this can fall to a decent entry point. They're fantastic convenience store operators and enjoying higher margins with fresh food. The 0.63% dividend is growing, but they spend their money by buying businesses to grow.

They've done well in Quebec, Ontario and Europe. A good allocator of capital. They're thinking of maybe going into Mexico. A good non-correlated asset relative to manufacturing and industrials if we go into recession. It should hold up well.

Couche-Tard vs Parkland Fuel? He prefers PKI-T as they own a refinery. He does not like the tobacco element of ATD.B-T. He would stay away from ATD.B-T and is glad he missed the recent 35% drop.

Great company and sustainable. It is a great long term hold.

A core holding since 2014. An amazing story. The industry is still fragmented, so they can be more aggressive in acquisitions, and their valuation has gotten steep. This is a bet on them driving same-store sales and more purchases. They vow to double earnings in 5 years, which he expects to happen.

(A Top Pick Oct 30/18, Up 34%) It was undervalued a year ago. He didn't expect this type of return. The company has made some US acquisitions that are working well out. Gas margins were above average and e-cigarettes are helping them as well. The recent fear of vaping regulations, won't hurt them, it may just slow their growth. A stock split is expected soon. He thinks another 10% upside is possible this year.

Why did it split? He owns this one and it has done well over the long term. He would buy again and it is fairly defensive. The idea of splitting allows smaller investors to get in and that is probably the idea here. He does not think it is a problem they split.

The stock was split for 2 for 1. They have moved up through the $60 resistance, and now there is momentum. At these prices, he would take profits.