Alimentation Couche-Tard (ATD-T)

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. 

Sold because analysis told him growth was slowing. Other things to do. Opportunity with 7-Eleven is far from a done deal. If successful, he'd take a hard look at re-entering. 

Made a lower high compared to earlier in the summer, and now making a lower low. Not a chart for him, as it signals change in the behaviour of the stock. Until something happens to put the technicals right, or there's growth acceleration, he wouldn't add.

He questions 10-30 years from now if their distribution of goods through gas stations will exist. They missed their last 3 earnings reports. In the mid-$60s he might buy, but currently he won't. He doesn't like ATD long term.

Hands down, slam dunk in favour of ATD. Bigger and better. Scale is a significant advantage, especially on sale of fuel. Better at merchandising. More diverse global footprint. Amazing serial acquirer. Hunting big game with bid for 7-Eleven. He's OK holding whether it gets 7-Eleven or not.

PKI has an activist investor rattling its cage for some time, with no resolution in sight. Activists usually get involved when assets are being mismanaged or under-managed, or management team's off course. Not earning same profits as ATD, despite similar end-markets.

He doesn't own it based on ESG grounds--a large art of their business is selling tobacco. The company is so large that organic sales are flat at the convenience store and gas station level. They must make ever-growing acquisitions to move the needle. It's not obvious they will succeed in buying the massive 7-11 chain; the Japanese government is resisting the deal. ATD growth looks unclear.

It is a great company with a great M&A strategy. He likes it but would choose a competitor a lot smaller with a similar type of model.

ATD is a tremendous capital allocator over many years. They don't overpay when buying companies. Is confident they can synergize 7-11, which would be their biggest purchase ever. Buy on any pullback. Is not afraid of an equity dilution, because there's a need for it sometimes.

It is looking to buy a company with 5 times as many stores and it means buying all these new locations for $600 000 each. If it improves these locations it could be a big win for ATD shareholders. Generally its merchandising hasn't been living up to expectations.