Alimentation Couche-Tard (ATD.TO)

Pursuit of 7-Eleven was an ambitious gambit. Consolation prize announced this week -- controlling stake in Poland's largest convenience store operator. Biggest acquisition to date, really well run, should be quite accretive to earnings. 

Continues to execute its regular playbook -- procurement clout to price sharply on fuel, which draws consumers into its stores. Merchandise margins are 3-4x higher than what it earns on fuel. Yield is 0.93%.

Is a little expensive now, but is waiting for a lower price. Watch the chart. They recently benefited from the rise in oil prices.

Great job executing. Last quarter saw fuel margins higher plus great same-store sales growth, he expects that over next several quarters. 

His team just got back in after it walked away from the 7-Eleven deal. It's now sticking to its knitting. What's the knitting of ATD? Consolidating the market (only 5% US market share), as it's doing in Europe to add ~2-3% growth. Huge opportunities for continued acquisitions. Same-store sales growth of 2-3%. Revenue growth of ~6%. Yield is 0.96%.

Acting really well. Climbing up in the relative strength rankings, just moved up into the top 25% of stocks (the "green zone"). Most importantly, after the rally it's consolidating here near $90.

It's seen a 20% run from last year. Defensive characteristics, but yield is less than 1%. After 7-Eleven miss, now back to basics. She's nervous about the health of the consumer. Not on her radar.

They failed 7-11 takeover was an overhang and overall convenience store sales have been weak in the U.S. So, ATD is offering more fresh food and prepared meals in their stores. They are seeing good results. Also, they have benefited from the volatile gasoline market from the US-Iran war; they sourced from lower-cost places. He expects them to buy more stores.

Don't sell. Has shown over time to be an amazing competitor and acquirer in the space. Though not successful buying 7-Eleven, they were very patient to ensure not overpaying. Paying 17-19x PE for this grower has proven to be a good move.

A great, profitable business and is well-run. It will grow over time with the economy and any companies they buy.

It sees volatility from the changing oil price; managers can't predict where fuel margins are going. They saw a breakout quarter recently, driven by wide fuel margins. Management has built a supply chain from several suppliers to keep prices low, despite the oil price spike recently. Their last earnings beat was major. Next quarter could be more volatile as the oil price falls. ATD is hitting new highs. There could be profit-taking before the stock price resumes going up.

Great quarter, beat by 35% on fuel. Margins were way up, 30% YOY. Same-store sales were also up. Market doesn't like fuel-based results, as it feels they're transitory. Good grower and compounder, good long-term story. He models 14% EPS growth; trading at 25x for quality, good balance sheet, M&A. Still not a bad entry point.

Very good earnings yesterday. One sector that AI is not likely to replace. Expanded into US -- a much more competitive, but larger, market. If you have a better investment idea, take some $$ off the table.