acquisition strategy
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....
TransDigm Group, $143.09, symbol TDG on New York (Shares outstanding: 52.4 million; Market cap: $7.5 billion; www.transdigm.com), is a leading maker of parts for commercial and military planes. The company’s main products include ignition systems and engine technology, pumps and valves, electric motors and generators, batteries and chargers, latching and locking devices, cockpit security systems, displays, seatbelts, lighting and control technology. In the three months ended March 31, 2013, TransDigm’s revenue rose 10.0%, to $465.6 million from $423.5 million a year earlier. Excluding one-time items, earnings per share gained 5.5%, to $1.74 from $1.65....
InnVest REIT, $4.24, symbol INN.UN on Toronto (Units outstanding: 93.7 million; Market cap: $390.9 million; www.innvestreit.com), owns 134 hotels in Canada. That makes it one of the country’s largest hotel operators, with about 17,000 rooms. The company also has a 50% interest in Choice Hotels Canada Inc. Franchisees operate InnVest’s hotels under a number of brands, including Comfort Inn, Holiday Inn, Quality Suites/Inn, Radisson, Delta, Travelodge, Hilton, Hilton Garden Inn, Staybridge, Fairmont, Sheraton and Best Western. In the three months ended March 31, 2013, InnVest’s revenue fell 4.6%, to $123.8 million from $129.8 million a year earlier. The REIT reported negative cash flow of $0.056 a unit in the latest quarter, compared to negative $0.023 a year earlier....
Parkland Fuel Corp., $16.86, symbol PKI on Toronto (Shares outstanding: 69.7 million; Market cap: $1.2 billion, www.parkland.ca), operates gas stations, convenience stores and a fuel distribution business, mostly in western Canada and Ontario. The company was called Parkland Income Fund prior to its conversion to a dividend-paying corporation on December 31, 2010. Parkland owns 136 rural gas stations and convenience stores. Its brands include Fas Gas Plus, Race Trac Gas and Short Stop (convenience stores). Many stations sell propane in addition to gasoline and diesel fuel. The company also operates Esso gas stations in western Canada and Ontario under a licensing deal with Imperial Oil (symbol IMO on Toronto)....
Agilent is up 9.5% since it was spun off from its parent company 14 years ago. We take a look at the outlook for this tech stock which bases its growth on an aggressive acquisition strategy. AGILENT TECHNOLOGIES INC. (New York symbol A; www.agilent.com) makes testing systems that help electronics firms improve their products. It also manufactures testing gear for medical research labs. Agilent was a unit of Hewlett-Packard until 1999, when Hewlett spun it off as a separate firm....
Pat McKeough responds to many requests for advice on specific stock picks and other questions on investment and the economy from the members of his Inner Circle. 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. This week, an Inner Circle member asked about a stock that has risen sharply this year. AutoCanada’s franchise car dealerships have profited from robust car sales and the company continues to expand. Pat looks at whether AutoCanada can sustain its growth and also measures the risk of its growth-by-acquisition strategy....
AutoCanada Inc., $28, symbol ACQ on Toronto (Shares outstanding: 19.9 million; Market cap: $557.2 million; www.autocan.ca), has 30 franchised car dealerships in six provinces. It sells numerous brands, but Chrysler vehicles supply nearly 75% of its revenue. The company aims to increase its number of dealerships by 20% over the next two years. That’s why it recently paid $3.8 million for People’s Automotive, a Volkswagen dealership in Grande Prairie, Alberta. It also paid $23.3 million for two dealerships in Winnipeg that sell Audis and Volkswagens. In addition, AutoCanada recently announced a deal to buy a large Chrysler dealership in Calgary. It did not reveal the purchase price, but this business had $68 million of revenue in 2012. AutoCanada plans to sell $40 million of new shares at $25.00 each to help pay for this purchase. This will increase the number of shares outstanding by 8%....
Pat McKeough responds to many requests for specific advice on stock market investing and other questions on investment and the economy from the members of his Inner Circle. 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. This week, an Inner Circle member asked about the prospects for one of Canada’s leading natural gas processors and distributors. AltaGas profits from a number of fixed long-term contracts, but it is also growing by acquisition and diversifying into new sources of energy. Pat looks at the company’s ability to manage this added risk going forward....
AltaGas Ltd., $37.78, symbol ALA on Toronto (Shares outstanding: 117.7 million; Market cap: $4.8 billion; www.altagas.ca), mainly extracts, processes and distributes natural gas. It also processes natural gas liquids and generates power in Alberta. Excluding one-time items, AltaGas earned $55.5 million in the three months ended March 31, 2013. That’s up 38.4% from $40.1 million a year earlier. Earnings per share rose 17.8%, to $0.53 from $0.45, on more shares outstanding. Cash flow per share gained 42.0%, to $1.15 from $0.81. Revenue increased 72.1%, to $620.5 million from $360.5 million. The improved results mostly came from Semco Holding Corporation, which operates natural gas utilities in Alaska and Michigan. In August 2012, AltaGas bought Semco for $1.14 billion, which is its biggest acquisition to date....
Progressive Waste Solutions, $23.80, symbol BIN on Toronto (Shares outstanding: 115.2 million; Market cap: $2.7 billion; www.progressivewaste.com), changed its name from IESI-BFC in May 2011. IESI-BFC was called BFI Canada until June 1, 2009, when it merged with its wholly owned subsidiary, IESI-BFC Ltd. In Canada, the company mainly operates as Progressive Waste Solutions, BFI Canada and Waste Services Inc. (WSI). It uses the Progressive Waste Solutions, IESI and WSI banners in the U.S. Progressive is one of North America’s largest solid-waste-management companies. However, it does not manage, collect or dispose of hazardous or liquid waste. Instead, it collects and disposes of waste from over four million commercial, industrial, municipal and residential customers. Progressive gets 63% of its revenue from the U.S. and 37% from Canada....