Alimentation Couche-Tard (ATD-T)

Had held in portfolios almost consistently since 2000. Dynamic takeover story. Watershed moment for corporate Japan after 2 lost decades. Current management of Seven & I is underperforming. ATD management really wants this takeover, but they would never overpay. There's a deal to be had, and taking over just the NA assets is a possibility.

He has owned it for a long time. There is a lot of overhang on the stock due to the attempt to buy the Seven Eleven chain. Investors wonder what happens next since it didn't go through. It is incredibly well run and rationalizes their acquisitions. It is ahead of the curve in several ways.

Really benefited from building out when US majors got out of retail gas operations. Now not a lot more room to grow in the US, so they looked to Japan (and were rebuffed). Good operator, buys and integrates well on M&A. Store traffic weakness with economic slowdown. Better growth stocks that don't rely strictly on M&A.

Pursuit of Seven & i spooked a lot of people, debt needed would've been a lot. If it's not a friendly transaction, they're not going ahead, but would work out well if it did.

In the meantime, they're exceptional capital allocators with good scale in a fragmented industry. Really good growth profile and valuation. Yield is 1.1%.

Challenges globally. Analysts give it a high $80s valuation in 12 months. For risk/reward, would look attractive at $75 or lower. He'd argue it's a range-trader for the next couple of years, not the growth play of past 3-4 years.

Quality company. M&A is really part of the thesis for global growth and expansion. Quite expensive on price to book. He never knows when to buy it unless it gets super-cheap. Market's wondering how it will grow. Confident in management.

Stock price actually incorporates all the news. Stock hit a peak earlier in February; since then, trading right around $78 plus or minus $5. This consolidation could go on for a long time. Before you can ID the next trend, you have to wait for it to break out -- below $73 or above $85. 

You can buy this now for diversification, but it won't be anything exciting. Keep an eye on that lower level. If it dropped below $70, then $60 or below is quite possible. You can discount the news as not important. Stock's been almost a double over the past 2 years.

Very profitable, ~20% ROE. Compounded EPS at 13% over last decade. Lean and efficient operator. Experienced consolidator in a fragmented industry. Closely watching its pursuit of Seven & I, would be synergistic if deal got done at a reasonable price. Pullback is very timely for a great company. Yield is 0.96%.

He bought it a year ago. It started a base and then broke down so he sold it two weeks ago.

Gigantic acquisition proposal in Japan, would need debt to make this happen. Deal going through would be absolutely tremendous for shareholders. Business not doing great right now, low-income consumer not spending as much at convenience stores. 

Stock's fallen too much, given that the concerns are well known. At lowest valuation seen in a long time.

Wonderful business. Announcement of Seven & I deal took a lot of wind out of the stock. Fear that a deal this big will necessitate equity dilution. If it does the deal, will likely work well. They don't do deals that don't work. If the deal doesn't go through, it's back to business as usual -- buying back shares and looking for other companies.

17x PE. Consolidating in the industry, which few can do. The bigger it gets, the more profitable it becomes. He'd buy here, even without clarity on the Seven & I deal.

He cut it loose for losing momentum, moving sideways for much of the year. Considering the massive bid for 7-11, he won't be looking at this for a while.

It has been a strong performing company and the only issue is the entry level. How much more productive will the earnings growth be. Wait and see what happens with how the acquisition works out, how it's financed, etc.

Recent M&A with 7-Eleven hard to predict. Very good capital allocation skills throughout the years. Would recommend buying with current share price weakness. Very strong business. Excellent management team.