ALIMENTATION COUCHE-TARD $91.36 - Toronto symbol ATD.B

ALIMENTATION COUCHE-TARD $91.36 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $17.3 billion; Dividend yield: 0.4%) grew from just 630 stores in Quebec in 1998 to 1,612 in 1999, mostly through the purchase of Silcorp Ltd. and its 980 Mac’s and Becker’s stores in Ontario and western Canada. Couche-Tard then continued to expand through profitable acquisitions, including buying 2,290 stores in the U.S. in 2003 from ConocoPhillips.

The company made another big acquisition in June 2012 with the $2.7-billion purchase of Norway’s Statoil Fuel & Retail chain of gas stations (all figures except share price in U.S. dollars).

In Europe, Couche-Tard now operates 2,263 outlets across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic states (Estonia, Latvia and Lithuania) and Russia. That’s in addition to its 6,221 stores throughout North America operating under the Couche- Tard and Circle K banners.

In the three months ended February 2, 2014, Couche-Tard’s sales fell 3.3%, to $11.1 billion from $11.5 billion a year earlier. The yearago quarter included 123 days of results from Statoil, while the latest quarter included 110. The shorter period was due to an adjustment to align Statoil’s accounting period with Couche-Tard’s. That was the main reason for the lower revenue.

Excluding one-time items, per-share earnings gained 13.6% in the latest quarter, to $0.92 from $0.81. Couche-Tard plans to split its shares on a 3-for-1 basis effective April 14, 2014.

Couche-Tard was our #1 buy for 2012. It has risen over 199% for us since then, but we think it still has more gains ahead.

Alimentation Couche-Tard is buy.

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