Boyd Group Services Inc. (BYD-T)

He'd wait a bit. Results being challenged. Nice weather this winter meant fewer collisions and less work for them. Opening new shops. Margins on wages is tight because of inflation. Over 40x earnings, high valuation. Buy closer to a 52-week low.

The shares' 30% drop is extreme. This is a growth-by-acquisition story, and this number has fallen a little. During Covid, labour costs rose and their were insurance issues about reimbursements. But cars now use more technology, which leads to higher accident repair bills to fix cameras, sensors, etc. This means they can grow more organically.

EPS of 44c missed estimates of 71c; revenue of $786.5M missed by 0.5%. EBITDA of $81.7M missed b7 7.5%. Mild weather impacted demand in the quarter. Pressure on earnings is expected to continue. Claims and appraisal volumes declined. BYD's cost structure in place exceeded levels of demand, after a couple of very solid prior quarters.  Sales did rise 10%. Same store sales growth is not expected in the Q2. Certainly disappointing after last year's stronger showing. Shares are down the most in three years. BYD has missed before, and has recovered. Its longer term performance record is excellent. But, this quarter will put it into the penalty box for a period of time. We would still not view it as a  sell, however, with the decline already in place. 
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Boyd has good operations and is a consolidator of collision centres. Has grown from a small cap to almost a large cap. It is not super cheap and needs bigger acquisitions to move the needle.
A second part of the call was on Lumine. Buy it for the long term - trading close to CSU's valuation.

EPS of 93c missed estimates of $1.05; revenue of $740M matched estimates. EBITDA of $94M was 1% light. Same store sales were good at 8.7%, but below estimates (9.5%). The company blamed mild winter weather. The long term forecast (doubling the size of the business in 2025 from 2019 levels) remains intact. It added 78 (net) locations last year. Heading into 2024, same store sales growth is still positive but running below the 10-year average. The stock has been quite strong but will likely sell off on the 'miss'. 
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Dominant in a fragmented industry. Grows through acquisition, very successful, still lots of runway for this. Good long-term hold.

Lots against them during Covid with no one driving, labour costs going up, and blocked supply chains. Those trends are unwinding. More driving = more accidents. With automation, repair costs are that much higher. M&A mojo should return.

Interesting business model, gets referrals from insurers. Labour shortages and other issues slowly being addressed. Well managed. He tries to avoid labour-intensive businesses, but he is looking at it.

Tough during Covid. Insurance rates and labour costs have come up. Good numbers last quarter. Now insurance is paying more, labour costs are going down, and consolidation is continuing. Fragmented industry, so lots of runway. Positive on the name.

Has sold shares in company.
Company has too much retail orientation (very hard business).
Auto-body shops require large capital investments.
Strong franchise - but would wait for shares to fall before investing.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. One of the largest operators of non-franchised collision repair centers in North America. 860 locations of which 724 are Gerber glass. Sales at $613 million, up 37.8% for the quarter ended June 30th, 2022. Management noted that demand is exceeding capacity in all US markets and indicating a recovery in Canadian markets. Unlock Premium - Try 5i Free