AutoCanada Inc.
ACQ-T
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About AutoCanada Inc. (ACQ-T)
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She is short the stock. She doesn’t like it. It has been problematic for many years. The acquisition in the US didn’t make sense. Two months later they wrote a significant portion off.
She is short the stock. She doesn’t like it. It has been problematic for many years. The acquisition in the US didn’t make sense. Two months later they wrote a significant portion off.
(A Top Pick June 22/17 - Down 29%) Sold it a while ago. They liked the model. They made a bad deal that put him in an alert and they also bought something in the US that didn’t make sense.
(A Top Pick June 22/17 - Down 29%) Sold it a while ago. They liked the model. They made a bad deal that put him in an alert and they also bought something in the US that didn’t make sense.
He tends to short companies that show negative trends and he plans to stay short on this even though it has already dropped so much. It has had a few disastrous quarters in a row. There was chatter a year ago about them spinning out some real estate assets but apparently that failed. The balance sheet is now getting tight, with covenants that limit them to 4x debt to EBITDA. He thinks they’ll push up against that this quarter. He’ll stay short until they start improving their margins.
He tends to short companies that show negative trends and he plans to stay short on this even though it has already dropped so much. It has had a few disastrous quarters in a row. There was chatter a year ago about them spinning out some real estate assets but apparently that failed. The balance sheet is now getting tight, with covenants that limit them to 4x debt to EBITDA. He thinks they’ll push up against that this quarter. He’ll stay short until they start improving their margins.
He has looked closely at this recently, but feels the balance sheet is scary. With a debt-equity of 4:1, it is too risky in the event of any recession. They make 90% on car servicing and feels a future recession could really impact this company.
He has looked closely at this recently, but feels the balance sheet is scary. With a debt-equity of 4:1, it is too risky in the event of any recession. They make 90% on car servicing and feels a future recession could really impact this company.
They exited their position when they announced an acquisition in the US a couple of months ago – and they were relieved they did so. The company reported management changes last night and took a write down on the Chicago dealership asset of $45 million – a third of the asset value. Same store sales were down again. It is a good business, but the value is not worth investing in at this point. He thinks the earnings per share will continue to decline.
They exited their position when they announced an acquisition in the US a couple of months ago – and they were relieved they did so. The company reported management changes last night and took a write down on the Chicago dealership asset of $45 million – a third of the asset value. Same store sales were down again. It is a good business, but the value is not worth investing in at this point. He thinks the earnings per share will continue to decline.
This started several years ago as a collection of Chrysler dealerships. They made an acquisition in Chicago that has added debt and needs to be proven as being accretive. He would watch to see how the new asset goes before buying.
This started several years ago as a collection of Chrysler dealerships. They made an acquisition in Chicago that has added debt and needs to be proven as being accretive. He would watch to see how the new asset goes before buying.
Has had a roller-coaster ride in the last year. It was one of the go-go stocks buying private dealerships, but they hit a downturn and then now new Management took over. He thinks new Management is eventually going to improve execution. There is concern also in terms of peak sales in automobiles. They continue to expand and diversify from Alberta. Depending on your view of auto sales you should look at the stock.
Has had a roller-coaster ride in the last year. It was one of the go-go stocks buying private dealerships, but they hit a downturn and then now new Management took over. He thinks new Management is eventually going to improve execution. There is concern also in terms of peak sales in automobiles. They continue to expand and diversify from Alberta. Depending on your view of auto sales you should look at the stock.
He has watched them for quite a while. They are a consolidator in the car dealership space. He doesn’t like the 80% decline in share price – great quality stocks don’t do this. If the stock broke below $17 on heavy volume, he would run for the exit. They are relatively highly leveraged and could face substantial issues during the next recession. Yield 2%.
He has watched them for quite a while. They are a consolidator in the car dealership space. He doesn’t like the 80% decline in share price – great quality stocks don’t do this. If the stock broke below $17 on heavy volume, he would run for the exit. They are relatively highly leveraged and could face substantial issues during the next recession. Yield 2%.
He sold out a few months ago. The recent selloff has prompted some shareholder resentment and a call for strategic alternatives. The latest quarterly earnings were disappointing. There was discussion of a US acquisition, but he feels it may be a lower margin one. He does not know how they will change the momentum.
He sold out a few months ago. The recent selloff has prompted some shareholder resentment and a call for strategic alternatives. The latest quarterly earnings were disappointing. There was discussion of a US acquisition, but he feels it may be a lower margin one. He does not know how they will change the momentum.
He sold his holdings. Previous management was unfocussed with its many purchases to grow the business, about 14 in one year, then they failed to integrate the back offices. New management came in promising to diversify their brands internationally and reduce their purchases. Management failed to exit a relationship with a company founder well. They bought a dealership in the U.S. which didn't make sense with no synergies. Management has become unfocussed again.
He sold his holdings. Previous management was unfocussed with its many purchases to grow the business, about 14 in one year, then they failed to integrate the back offices. New management came in promising to diversify their brands internationally and reduce their purchases. Management failed to exit a relationship with a company founder well. They bought a dealership in the U.S. which didn't make sense with no synergies. Management has become unfocussed again.
He sold it at the start of 2018. The stock has taken a dive. It had a bad quarter, but it could move back to $18-20. It's currently at cheap valuations. A problem is that they can't buy enough dealerships to grow their company, at least not in Canada, so they must look to the U.S. Also, rising interest rates and the late auto cycle are headwinds.
He sold it at the start of 2018. The stock has taken a dive. It had a bad quarter, but it could move back to $18-20. It's currently at cheap valuations. A problem is that they can't buy enough dealerships to grow their company, at least not in Canada, so they must look to the U.S. Also, rising interest rates and the late auto cycle are headwinds.
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