Parkland Fuel Corp (PKI-T)

It is an OK company with cash flow but has not received respect. It has tried to improve its operations and cut costs but it is a cyclical business. It is quite leveraged.

Owns in balanced income fund, hasn't worked this year. Down 20% before dividends, not great. Volatile fuel prices, consumer not spending as much. Dividend grower for many years. Management in fight with major shareholder. Ridiculously cheap valuation, share price should have found a floor. Could be subject of an acquisition.

Likes energy, and this is showing signs of improvement. Moved above 50-day MA for the first time since start of the year. Likes the setup, and seems to be turning around technically. If he's correct about our place in the cycle, this name should work at least till the end of the year and likely into the start of next. Yield is 3.91%.

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.

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.

The dividend is safe but their long-term growth is a question mark.

Not a baby Couche-Tard, as PKI depends more on fuel. Internal struggle between owners. If you don't own, buy ATD instead on a pullback. If you do own, sit tight and wait for drama to play out. Not worth the risk.

Smaller than ATD, but they have refining capacity to make it interesting, so they can send fuel to their locations. He has preferred PKI over ATD, but got out after the company replaced some executives with talk of M&A. He's watching it.

Refining operation has been an overhang. Somewhat cyclical. Better opportunities elsewhere in the energy space to generate income. See her Top Picks.

It has provided a 5 to 7% return per year over the long term. It is on the retail side of energy but has some commodity exposure. It has debt and needs to get the level down. Pays a 3 1/2% dividend.

He has 2 types of portfolios. One is best ideas, and the other one is more balanced with Canadian dividend payers that have good balance sheets and potential for growth. Canadian dividend aristocrat, raising dividend each year for over a decade.

M&A got ahead of itself. Capital allocation was lacking. Activism. Refinery closed. Not as good as ATD, so he'd recommend that one. Valuation is arguably very cheap, could be some short-term events, generates lots of cashflow, balance sheet now in great shape. Not great, but decent at a very attractive valuation.

PKI is up roughly 5% today as it rejected its largest shareholder, Simpson Oil's, request for a review of strategic alternatives. We continue to like PKI here and while the added executive and shareholder disagreements are not great for the stock, its fundamentals have shown significant improvements. 
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