There is rational competitors and high barriers of entry. That is why he really likes the industry. Pricing power is important. The problem they have is they took on a lot of business in the last while and some of these customers are not happy. There are some issues there. One of the best networks around.
An Israeli company that trades in the US. The largest generic pharmaceutical company in the world. They went through a difficult management period after its founder passed away. The important part of the generics is not really the molecule part (if you have smart people you can copy the molecules). The important part is the legal aspect. And here this company is very very strong. It is going to take a while to restructure the company, but they have a great franchise. Over a 3 to 5 years’ time horizon it is a great story to buy.
Great Canadian company. California Closets, College Pro Painters are some of their brands. They are also in the property management business. Stock trades at 28 times earnings but it is a very capital light business with no fixed assets. Generate very high free cash flows. Very good story in the US. (Analysts’ price target is $94.75)
They own the name and he would buy it here. Dividend yield is high. The value of their assets is very good. They are facing some issues with taxes in the US. The stock is under a lot of pressure for this and other issues. Looks very cheap.