Investment Q&A

Q: On the balance sheet November 2015 I note 4.7B in Equity. I note 7.3B in Goodwill and Intangible assets. The new acquisition will probably increase this significantly. Can I get your take on this. Also can you explain tax treatment when you write off Goodwill and Intangibles. Regards

Q: i am curious as to the pullback in the stock, is it earnings related, or rise in cdn. dollar or price of oil. dave

Q: I see you like this company over EMP.A which reported bad earnings due to write-off of goodwill from their safeway purchase & sales down in Western Canada due to low oil - I think this is just an excuse - the reason is probably poor integration - people need to eat! It seems to me that from a long-term perspective ( I am an investor not a trader ) EMP.a might present a better opportunity than ATD because: PEG ratio 1, PE to ROE is 1 - pay a dollar for a dollar of earnings, growth through acquisition with its inherent risk & virtually no dividend - I have a problem buying a stock that does not pay at least 3% with a history of increasing.
This situation reminds me of L when they had issues which brought their stock down- finally got their logistics system on track - stock steady increase over last three years.
Comments please.

Q: Do you know how ATD.B plans to pay for their acquisition of some of Imperial Oils gas stations?

Q: I am looking at adding to Consumer Non Cyclicals and will be holding for the long term (5+ years). Do you have any suggestions that have good growth opportunities and look fairly attractive right now?

Q: What would be your top picks in consumer staples stocks for 2016?

Q: What Canadian Companies have a great deal of their sales in USA and will benefit from low Canadian Dollar. I can think od atd.b, mal, lnr, mg, . Which ones would you recommend.

Q: we have purchased 450 shares of this stick at 28 50. would it be wise to sell 200 shares for profit or is there a good reason to keep it for a while thanks bill

Q: Could the following analyst be asking a valid question or is his POV just a ploy in the old game of getting one to trade?

"Alimentation Couche-Tard Inc.’s share price has soared 60 per cent in the last year thanks to factors such as falling gasoline prices, a rising U.S. dollar, low interest rates and access to credit. But how long can the highs last?

“Seven years ago, a reverse scenario prevailed and we couldn’t convince enough investors to buy the stock,” David Hartley of Credit Suisse said in a note to clients on Monday. “Could we be at reverse point of inflection now?”

Also, just how important to ATD's profitability are gas margins compared to the rest of the business?

Full story is here: http://business.financialpost.com/investing/trading-desk/how-long-can-the-highs-last-for-alimentation-couche-tard-inc-shares

Thanks, J.

Q: Over the past few days, I have heard several talking heads on BNN (which I watch infrequently) disparage the Consumer Staples sector and ATD specifically, saying the valuations are too high. Which metrics are they using? You haven't rated ATD yet so I haven't found the answer on this site.
I like watching the technicals (but don't react to them). Neither the sector as a whole nor ATD is overbought and in fact the sector is closer to oversold. And, ATD has been on an unbroken uptrend since July of 2009 - but is that a bad thing?

Q: Hi Peter and Team,

I saw this article on National Post that could be driving down ATD.B. Sounds like Credit Suisse analysts are saying that its price to cash flow ratio is inflated and that it's driving a bubble in consumer stocks. What are your thoughts on this? I have a fairly large position (~8%) in ATD.B and don't want to get caught in a sector falling out of favor (like what just happened in biotech).

Jordan

Q: ATD is getting hammered this morning on apparently no news. I have a small position initiated (like 1%) and was planning on building over a period of months. Is there a reason not to add on this pull back?

Q: Is ATD too expensive at this point? Would you have an entry point if so?
Thank you.

Q: What do you make of the CFO resignation today. How instramental was he in Couche Tarde's recent growth? Do you know how deep their bench is for an internal replacement? I noticed that ATD was Peter's top pick on BNN today. Whoud this recent development concern you?

Thanks,
Hans

Q: Hello team, Would appreciate your comments on today's earnings results.
Thank you!

Q: Hello team, Your comments pls. on ATD's 11% (!) fall (they say related to the purchase of The Pantry) and the rest of their 1Q results and opinion going froward.
Thank you

Q: Please give me your thoughts on Atd-b latest quarter results. Why were currency fluctuations a negative. I thought that a stronger US dollar would help. Thank you for your time.

Q: ATD.B seems to be on an upward momentum. I would have expected the market turmoil on Greece to negatively affect this company, but that does not seem to be happening. Given its European holdings, would you consider a Greek exit to be a bad influence in near term stock performance?

Q: I am looking at adding to ATD.B. LTD seems to have come down nicely over the past year and the number of shares outstanding seems fairly stable. I am wondering about growth. Morningstar shows $1.89 for 2016 up 8 cents from 2015. What kind of growth does your analysis show? As an NR stock do you have plans to do a report at sometime or is $26b market cap too large?
Many thanks
Mike

Q: To round out recent comments on ATD.B (Alimentation Couche-Tard), here are excerpts from a couple of recent articles:

In a research note, senior analyst Bonnie Herzog said she believes positive trends in the convenience-store sphere will continue as “the industry is embarking on a new era of sophistication and growth.”

As the industry continues to grow, it remains fragmented and larger chains continue to get stronger. Strong fuel margins, despite soft gallon trends, will help to drive future growth across the industry, the report said.

Full article here: http://www.cspnet.com/industry-news-analysis/corporate-news/articles/analyst-bullish-state-convenience

Like all large convenience-store chains—especially those that have grown excessively through acquisition— The Pantry lays claim to some “premium” locations and others “in worse shape than average.” Therein lies the biggest challenge and greatest opportunity for new owner Alimentation Couche-Tard as it begins to integrate The Pantry’s Kangaroo Express c-stores into its business, according to a new report from a convenience-store analyst.

Full article at http://www.cspnet.com/industry-news-analysis/corporate-news/articles/challenges-opportunities-integrating-pantry