Boyd Group Services Inc. (BYD.TO)

Labour-cost challenges over the years. Accident volumes last year were pretty weak, now seeing an uptick. Slight tailwinds from complexity in vehicles being more expensive to repair. Need to see a base, then momentum to kick it higher.

Rollup king of autobody shops. Massive gap right now between analysts' expectations and what the market's thinking. Hit hard, still struggling; down ~12% on earnings day last week alone. 

Q4 showed improvement, with second consecutive quarter of positive same-store-sales growth. Margins expanding. But earnings fell. Claims cycle has to normalize, and recent acquisition has to deliver. If you hold, keep an eye on those things. She needs at least a couple of clean quarters before stepping in.

The street has been wrong on this name for years. Take analysts' targets with a grain of salt.

Where BYD operates doesn't have the same rule of law, so he avoids these places. EVs will always be around, but consumption won't be as they were.

(Timeframe not quite a year.)  Collision repair has been challenged for quite some time. Thinks industry has bottomed and is doing better. This company's results have been tremendously better than the rest of the industry. Same-store sales have gone positive, which is a very good indication. Stability of used-car prices helps its business.

Expects it to accelerate M&A with continued good multiples. Caveat: the industry is not as fragmented as it was, so don't expect the same accretive M&A trajectory. Introduced Project 360 to improve efficiencies, which isn't easy in this business model but management's done a good job.

One of the better compounders in Canada, mainly through acquisitions. Has gone sideways recently. Over time, should continue its trend higher. Ranks middle of the pack right now. He likes to see revenue acceleration, and this one isn't in that camp right now.

Are facing some issues. As the minimum wage has risen, their labour costs have too. Also, pre-tariffs, they faced labour shortages. After tariffs, the car parts they used possibly faced tariffs. Is defensive, but the valuation is rich. Is cash-flow positive.

Strong performer over the long term, but recent issues due to industry headwinds. Covid reduced demand, cost inflation. Good company, more reasonable valuation at today's price. On his radar. High quality.

If your position is overweight (~5% is a reasonable position), perhaps trim. 

In sideways, no-man's land. A laggard right now. Wait for signs that the trend is changing. Lower highs and lower lows, and that's not where you want to be.

Usually pretty steady business. Recent spike in insurance premiums, so the repair industry's been hit. BYD has been doing a tremendous job in this tough environment, gaining lots of market share. You can put off repairs for only so long; eventually there's a normalization of insurance premiums, and there will be an eventual catchup in submission rates. Yield is 0.3%.

Stands to benefit from tariffs, as there will be fewer write offs, which means more repair work.

It is now better to buy than before. Higher prices for repairs held people back but now they are more used to it. It has a better outlook ahead for the next 1 or 2 years. It has invested a lot in the  scanning and calibration business which is quite lucrative.

Growth plans are getting traction. Looks better than before. Because of a jump in the costs of car repairs last year, people deferred getting those repairs. So this business is coming back. Also, BYD's scanning and calibration business is growing, a lucrative one they used to outsource. Are building their own locations and buying fewer businesses, which give them a better return.

Based in Winnipeg, yet 90% of business comes from US. Pulled back, though always priced at a premium, so valuation is not strikingly attractive. Seeing less traffic due to mild weather and a weaker economy. Needs to renegotiate insurance contracts for increased labour costs. Providing more in-house services, which requires more up-front investment. On her radar.

BYD has faced recent weakness on slowing same-store sales, labour headwinds, and increased upfront expenses from greenfeield and brownfield investments. Its valuation is expensive given the companies historical trackrecord of execution and successfully integrating acquisitions. We think a reversal of the factors mentioned can push BYD back up to historical levels. We believe that these will reverse and analyst outlook calls for EPS to double next year, so we will be watching the upcoming earnings closely.
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90+% revenue comes from the US. Cashflow attributes are very strong. Continues to acquire. There are only so many rollups he's willing to invest in. Quite reasonable, but just hasn't made the cut for his portfolio. Nothing wrong with the company, but slightly dilutive on the share count and insider ownership not high.

A somewhat weak year, but good outlook for growth. Could add on pullback, but there are better ideas out there.