acquisition strategy
CANADIAN TIRE CORP., $108.49, Toronto symbol CTC.A, earned $169.9 million in the quarter ended June 28, 2014, up 9.7% from $154.9 million a year earlier. Earnings per share gained 11.0%, to $2.12 from $1.91, on fewer shares outstanding. That easily beat the consensus estimate of $2.02. Overall sales rose 4.8%, to $3.2 billion from $3.0 billion. Strong demand for spring-related goods, such as garden tools, auto supplies and bicycles, increased same-store sales by 2.8% at the 493 Canadian Tire outlets....
AutoCanada Inc., $74.80, symbol ACQ on Toronto (Shares outstanding: 21.9 million; Market cap: $1.8 billion; www.autocan.ca), has 42 franchised car dealerships in eight provinces. It sells numerous brands, including Chrysler, Dodge, Jeep, Ram, Fiat, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, BMW and Mini. However, Chrysler vehicles (including Dodge, Jeep, Ram and Fiat) supply nearly 74% of the company’s revenue. In 2013, AutoCanada’s dealerships sold roughly 36,000 vehicles and processed about 364,000 repair and maintenance orders in their 381 service bays....
Pat McKeough responds to many requests from members of his Inner Circle for specific advice on buying stocks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle. Recently an Inner Circle member asked us about a Canadian stock that is tapping into the economic growth of Western Canada. WesternOne operates through a series of smaller acquisitions that build up its business in construction heating, aerial equipment and modular buildings. Pat looks at the company’s expanding business and the potential risks and rewards of its growth-by-acquisition strategy in a very competitive market. Q: Pat, could you give me your opinion on WesternOne, please?...
WesternOne, $7.90, symbol WEQ on Toronto (Shares outstanding: 31.7 million; Market cap: $250.4 million; www.weq.ca), aims to keep expanding by acquiring privately owned small- and medium-sized businesses, mainly in Western Canada. The company converted from an income trust to a corporation on January 1, 2013. WesternOne operates in two main areas: construction heat services and aerial equipment; and modular building construction and leasing. The company’s businesses include Britco Building Innovation, a designer and maker of commercial custom-built mobile and modular buildings in North America. In January 2013, Britco expanded into Australia through the acquisition of APB, one of that country’s largest modular building manufacturers....
Pat McKeough responds to many requests from members of his Inner Circle for specific advice on buying stocks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle....
Patient Home Monitoring, $0.26, symbol PHM on Toronto (Shares outstanding: 105.7 million; Market cap: $28.0 million; www.phmhometesting.com), plans to keep acquiring small firms that serve chronically ill patients in their homes. It then aims to increase its revenue per patient by offering all these companies’ services to its growing client base. In the three months ended December 31, 2013, the company’s revenue jumped to $2.4 million from $1.0 million a year earlier. It earned $140,294, or $0.0014 a share, compared to $140,120, or $0.0022, on fewer shares outstanding. Patient Home Monitoring holds cash of $8.5 million, or $0.08 a share, and has low debt. The aging population and rising incidence of chronic disease are expanding the company’s market. At the same time, the increasing cost of caring for patients in hospitals is leading to a push for more in-home care. However, Patient Home Monitoring’s growth-by-acquisition strategy adds risk....
Davis + Henderson Corp., $31.00, symbol DH on Toronto (Shares outstanding: 80.7 million; Market cap: $2.5 billion; www.dhltd.com), is a leading cheque printer. It also sells software for managing chequing and credit card accounts and technology for approving loans and searching for and registering liens. Davis + Henderson’s clients are mainly financial institutions. It now has over 7,000 customers in Canada and the U.S. In April 2011, the company bought Wisconsin-based Mortgagebot LLC, which sells web-based mortgage software, for $231.8 million U.S. Mortgagebot’s software runs on more than 6,000 mortgage websites and generates mortgage applications for nearly 1,100 U.S. banks and credit unions....
Pat McKeough responds to many requests from members of his Inner Circle for specific advice on investing in stocks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle....
Centric Health, $0.33, symbol CHH on Toronto (Shares outstanding: 153.0 million; Market cap: $49.7 million; www.centrichealth.ca), is a health care services provider operating in five main areas: physiotherapy, pharmacy, surgical and medical centres, assessments, and medical equipment. In the three months ended September 30, 2013, Centric’s revenue rose 3.0%, to $110.6 million from $107.4 million a year earlier. The company lost $0.30 a share, compared to a loss of $0.05 a share. However, cash flow per share was positive, at $0.05, compared to $0.04 a year ago. The company aims to continue its aggressive acquisition strategy....
AutoCanada Inc., $45.30, symbol ACQ on Toronto (Shares outstanding: 21.7 million; Market cap: $981.8 million; www.autocan.ca), has 32 franchised car dealerships in six provinces. It sells numerous brands, including Chrysler, Dodge, Jeep, Ram, Fiat, Chevrolet, GMC, Buick, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, and Volkswagen. However, Chrysler vehicles (including Dodge, Jeep, Ram and Fiat) supply nearly 75% of its revenue. The company aims to increase its number of dealerships by 20% over the next two years. To that end, it bought People’s Automotive, a Volkswagen dealership in Grande Prairie, Alberta, for $3.8 million earlier this year. It also paid $23.3 million for two dealerships in Winnipeg that sell Audis and Volkswagens....