ATD/B CN
Alimentation-Couche Tard, Inc. - Ordinary Shares - Class B (Sub Voting)
Consumer
01/17/2020
Presented
| Date | 01/14/2020 |
| Price | CA$43.79 |
| Market Cap | $39.32B |
| Ent Value | $44.12B |
| P/E Ratio | 18.38x |
| Book Value | CA$11.32 |
| Div Yield | 0.57% |
| Shares O/S | 1,123.22M |
| Ave Daily Vol | 1,307,664 |
| Short Int | N/A |
Current
| Price | CA$49.67 |
| Market Cap | $37.64B |
| Alimentation Couche-Tard Inc. operates and licenses convenience stores. Its convenience stores sell tobacco products, grocery items, beverages, and fresh food offerings; road transportation fuel; and stationary energy, marine fuel, aviation fuel, and chemicals. The company operates its convenience stores chain under various banners, including Circle K, Corner Stone, Couche-Tard, Holiday, Ingo, Mac's, Re.Store, and Topaz. It is also involved in the sale of lottery tickets, calling cards, gift cards, postage stamps, and bus tickets; issuance of money orders; and provision of automatic teller machines and car wash services. As of April 28, 2019, it operated and licensed 12,575 convenience stores, which include 9,794 company-operated stores in North America, Ireland, Scandinavia, Poland, the Baltics, and Russia, as well as 2,150 stores, which are operated under the Circle K banner in Cambodia, China, Costa Rica, Egypt, Guam, Honduras, Hong Kong, Indonesia, Macau, Mexico, Mongalia, New Zealand, Saudi Arabia, the United Arab Emirates, and Vietnam. The company was formerly known as Actidev Inc. and changed its name to Alimentation Couche-Tard Inc. in December 1994. Alimentation Couche-Tard Inc. was founded in 1980 and is headquartered in Laval, Canada. |
Publicly traded companies mentioned herein: Alimentation Couche-Tard Inc (ATD/B CN), Dollar General Corp (DG), Dollarama Inc (DOL CN)
Highlights
The presenter is long shares of Alimentation Couche-Tard Inc (ATD/B CN), the convenience store operator best known for its Circle K brand. Although the company is quite large (~C$50B market cap) and more than half of its stores are in the US, it remains somewhat under the radar because the stock only trades in Canada, where the founders are from. In the presenter’s opinion, the lack of coverage and concerns regarding Juul sales have caused the market to underappreciate ATD’s strong growth and potential for margin improvement. He expects the growth and margin stories to drive shares 15% – 20% from their current ~C$43 over the next two years. There is also the possibility that ATD receives a higher EBITDA multiple, which he thinks is deserved, which would combine with the fundamental growth outlook to offer 30% – 50% upside in the same timeframe.
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