ALIMENTATION COUCHE-TARD $73.50 - Toronto symbol ATD.B

ALIMENTATION COUCHE-TARD $73.50 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $13.6 billion; Dividend yield: 0.5%) operates 6,198 convenience stores throughout North America. The Canadian outlets operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand.
 In Europe, Couche-Tard operates 2,287 stores across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic states (Estonia, Latvia and Lithuania) and Russia.
 In the three months ended July 21, 2013, Couche-Tard’s sales jumped 48.0%, to $8.9 billion from $6.0 billion a year earlier. The gain mostly came from Norway’s Statoil Fuel & Retail chain of European gas stations, which Couche-Tard bought for $2.7 billion in June 2012 (all figures except share price in U.S. dollars). The company also sold more fuel, and expanded its merchandise sales.
 Excluding one-time items, earnings rose 20.9%, to $220.0 million from $182.0 million. Per-share earnings gained 16.0%, to $1.16 from $1.00, on more shares outstanding.
 Couche-Tard’s outlook is positive. It continues to introduce moreprofitable products at its North American stores, including new drinks and improved fresh and takeout food. There is lots of potential for it to sell similar items through the Statoil gas station chain.
 The company raised its quarterly dividend by 16.7% with the September 2013 payment. The shares currently yield 0.5%.
 Couche-Tard was our #1 buy for 2012. It has risen over 140% for us since then, but we think it has more gains ahead.
 Alimentation Couche-Tard is now a buy.

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