ALIMENTATION COUCHETARD $60.49 - Toronto symbol ATD.B

ALIMENTATION COUCHETARD $60.49 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 567.4 million; Market cap: $34.1 billion; Dividend yield: 0.4%) is at new all-time highs after reporting improved profits in the latest quarter.

In the three months ended July 19, 2015, Couche-Tard’s sales fell 2.2%, to $8.98 billion from $9.19 billion a year earlier (all figures except share price and market cap in U.S. dollars).

The fall came from lower gasoline prices, while the higher U.S. dollar cut the contribution from its European operations. That was partly offset by a full quarter of sales from The Pantry, which Couche-Tard bought for $1.7 billion on March 16, 2015.

Earnings per share rose 10.4%, to $0.53 from $0.48, thanks in part to higher profit margins on merchandise and fuel.

Growth by acquisition can be risky, especially with purchases as big as The Pantry and Norway’s Statoil Fuel and Retail, which Couche-Tard bought for $2.7 billion in 2012. However, the company has a record of successfully integrating firms it buys.

Couche-Tard is a buy.

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