Alimentation Couche-Tard

ALIMENTATION COUCHE-TARD $45.20 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 179.4 million; Market cap: $8.1 billion; Dividend yield: 0.7%) has reported sharply higher sales and earnings in its latest quarter. Without one-time costs related to its $2.7-billion purchase of Statoil Fuel & Retail ASA, the company’s earnings per share rose 26.7%, to $0.95 from $0.75 (all figures except share price in U.S. dollars). Sales rose 16.1% to $6.0 billion from $5.2 billion. The gains came from higher fuel prices, acquisitions and higher merchandise sales. (The company gets about 30% of its sales by selling merchandise.) The results also included 11 days of operations from the Statoil gas station chain. Alimentation Couche-Tard is still our #1 buy for 2012....

ALIMENTATION COUCHE-TARD $45.20 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 179.4 million; Market cap: $8.1 billion; Dividend yield: 0.7%) has reported sharply higher sales and earnings in its latest quarter. Without one-time costs related to its $2.7-billion purchase of Statoil Fuel & Retail ASA, the company’s earnings per share rose 26.7%, to $0.95 from $0.75 (all figures except share price in U.S. dollars). Sales rose 16.1% to $6.0 billion from $5.2 billion.

The gains came from higher fuel prices, acquisitions and higher merchandise sales. (The company gets about 30% of its sales by selling merchandise.) The results also included 11 days of operations from the Statoil gas station chain.

Alimentation Couche-Tard is still our #1 buy for 2012.

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ALIMENTATION COUCHE-TARD, $49.95, symbol ATD.B on Toronto, reported sharply higher sales and earnings in its latest quarter. The company is the largest convenience store operator in Canada, with over 2,000 outlets. It also has nearly 3,700 U.S. stores. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. If you exclude one-time costs related to its $2.7-billion purchase of Norway’s Statoil Fuel & Retail ASA, Couche-Tard’s earnings rose 23.8% in the three months ended July 22, 2012, to $173.0 million from $139.7 million a year earlier (all figures except share price in U.S. dollars). Earnings per share rose 26.7%, to $0.95 from $0.75, on fewer shares outstanding. Sales rose 16.1% to $6.0 billion from $5.2 billion....

DOREL INDUSTRIES $29.65 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 31.9 million; Market cap: $945.8 million; Dividend yield: 4.0%) has just doubled its quarterly dividend, to $0.30 from $0.15. The shares now yield a high 4.0%. The increase follows the company’s strong 2012 second-quarter results. In the three months ended June 30, 2012, Dorel’s sales rose 2.4%, to $633.7 million from $619.0 million a year earlier (all figures except share price in U.S. dollars). Revenue increased at all three of the company’s divisions. Earnings per share rose 35.7%, to $0.95 from $0.70 a year earlier. The gain resulted from the higher revenue and increased sales of more profitable products. The company holds cash of $45.1 million, or $1.44 a share. Its long-term debt of $316.8 million is a reasonable 33.5% of its $945.8-million market cap....

ALIMENTATION COUCHE-TARD $50.95 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 179.4 million; Market cap: $9.1 billion; Dividend yield: 0.6%) has agreed to buy 27 Sun Mart convenience stores in Washington State from Sun Pacific Energy for an undisclosed amount.

All but one of these outlets sell fuel. Nineteen of the stores’ gas stations operate under the Shell banner, and seven use the Exxon label. Couche-Tard will convert all 27 stores to its Circle K banner, although they will still sell Shell and Exxon fuel.

Alimentation Couche-Tard is still our #1 buy for 2012.

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METRO INC. $53 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 98.9 million; Market cap: $5.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.metro.ca) is Canada’s third-largest supermarket operator, after Loblaw and Sobeys. The company has about 600 supermarkets in Quebec and Ontario. It also operates 260 drugstores under the Brunet, The Pharmacy and Drug Basics banners.

Metro’s sales rose 7.4%, from $10.6 billion in 2007 to $11.4 billion in 2011 (fiscal years end September 30). Earnings fell 5.0%, from $295.6 million in 2007 to $280.8 million in 2008. Metro is an aggressive buyer of its own shares. Because of fewer shares outstanding, per-share earnings fell 2.4%, from $2.54 to $2.48.

However, earnings turned around in 2009, rising 27.8%, to $359.0 million, or $3.23 share. That’s mainly because the company lowered its advertising costs by converting its various banners in Ontario to the Metro brand. Earnings continued to rise, and reached $400.6 million, or $3.87 a share, in 2011.

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There is a history of Canadian consumer stocks trying, and failing, to establish a presence in the United States. But there are several outstanding success stories, such as Alimentation Couche-Tard (Toronto symbol ATD.B) our #1 Stock for 2012, which has profited extensively from its convenience stores and gas bars in the U.S. A new partnership initiative in the U.S. by Reitmans is on a more modest scale than Couche-Tard’s operations, but the women’s wear retailer is looking for a welcome boost in sales. REITMANS (CANADA) LTD. (Toronto symbol RET.A; www.reitmans.com) owns 925 women’s clothing stores across Canada. The chain consists of 364 Reitmans, 154 Penningtons, 153 Smart Set, 114 Addition Elle, 74 Thyme Maternity and 66 RW & Co. stores....

AASTRA TECHNOLOGIES, $16.56, symbol AAH on Toronto, develops and markets products and systems for accessing communication networks, including the Internet. Its technology is centred around business telephone systems and includes products that integrate land lines and mobile phones. In the three months ended June 30, 2012, the company’s sales fell 15.5%, to $147.1 million from $174.1 million a year earlier. Sales declined in all regions, including Western Europe, where Aastra gets the majority of its revenue. The lower sales caused the company’s earnings to fall sharply, to $1.9 million, or $0.15 a share, from $6.1 million, or $0.43 a share. Cash flow per share fell 43.8%, to $0.45 from $0.80....

ALIMENTATION COUCHE-TARD $48.37 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 179.4 million; Market cap: $8.7 billion; Dividend yield: 0.6%) has reported sharply higher sales and earnings in the latest quarter. In the three months ended April 29, 2012, Couche-Tard’s earnings per share rose 88.6%, to $0.66 from $0.35 a year earlier (all figures except share price in U.S. dollars). Sales rose 28.0%, to $6.1 billion from $4.7 billion. The gains came from higher fuel prices, acquisitions and higher merchandise sales. The company gets about 30% of its sales by selling merchandise....

ALIMENTATION COUCHE-TARD, $48.20, symbol ATD.B on Toronto, reported sharply higher sales and earnings in the latest quarter. The company is the largest convenience store operator in Canada, with over 2,000 outlets. It also has nearly 3,700 U.S. stores. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. In the three months ended April 29, 2012, Couche-Tard’s earnings jumped 82.6%, to $117.8 million from $64.2 million a year earlier (all figures except share price in U.S. dollars). Earnings per share rose 88.6%, to $0.66 from $0.35, on fewer shares outstanding....