Alimentation Couche-Tard
For most of its 62-year history, grocery-store operator Metro focused solely on its home province of Quebec. In 2005, it successfully expanded to Ontario with its acquisition of the A&P chain. This purchase gave Metro the size it needed to compete with other supermarket chains, such as Loblaw, and with non-traditional food sellers, such as Wal-Mart. The company now aims to build on its recent success with several new initiatives. These include lowering its marketing costs by consolidating its banners and private-label brands. The company is also launching a new customer-loyalty program through a joint venture with a leading marketing firm. That should help it drive long-term sales growth. These initiatives will help Metro thrive in a fiercely competitive industry. Moreover, its stake in convenience-store operator Alimentation Couche-Tard is an overlooked asset....
For most of its 62-year history, grocery-store operator Metro focused solely on its home province of Quebec. In 2005, it successfully expanded to Ontario with its acquisition of the A&P chain. This purchase gave Metro the size it needed to compete with other supermarket chains, such as Loblaw, and with non-traditional food sellers, such as Wal-Mart. The company now aims to build on its recent success with several new initiatives. These include lowering its marketing costs by consolidating its banners and private-label brands. The company is also launching a new customer-loyalty program through a joint venture with a leading marketing firm. That should help it drive long-term sales growth. These initiatives will help Metro thrive in a fiercely competitive industry. Moreover, its stake in convenience-store operator Alimentation Couche-Tard is an overlooked asset....
INTUITIVE SURGICAL, $280.11, symbol ISRG on Nasdaq, has received approval to sell its “da Vinci” surgical system in Japan. That country is the world’s second-largest market for medical technology after the U.S. The da Vinci is a computerized surgical system. Guided by a miniature camera connected to a 3-D monitor, surgeons use the da Vinci to operate by remotely manipulating tiny robotic arms. This is safer and far less invasive than regular surgical techniques, and helps cut a patient’s recovery time and post-operative discomfort. It also reduces scarring and infection risk. The da Vinci system is used in heart surgeries, prostatectomies and hysterectomies, among other procedures. Now that Intuitive has the approval of the Japanese Ministry of Health, Labour and Welfare, the company will focus on meeting necessary trade and import requirements. It will also begin setting up a marketing and payment structure....
REITMANS (CANADA) LTD. $16.09 (Toronto symbol RET.A; SI Rating: Extra Risk) (514-384-1140; www.reitmans.com; Shares outstanding: 70.8 million; Market cap: $1.1 billion) owns 971 women’s clothing stores across Canada. The chain consists of 368 Reitmans, 164 Smart Set, 162 Penningtons, 123 Addition Elle, 76 Thyme Maternity, 62 RW & Co. and 16 Cassis stores. Reitmans continues to monitor its regional markets, and open and close stores as necessary. In the three months ended August 1, 2009, Reitmans’ revenue fell 1.3%, to $286.1 million from $289.5 million a year earlier. Same-store sales declined 2.2%. Earnings fell 25.3%, to $26.4 million, or $0.38 a share, from $35.4 million, or $0.50 a share....
AEROPOSTALE INC., $39.70, symbol ARO on New York, reported higher sales and profits this week. In the three months ended August 1, 2009, Aeropostale’s same-store sales rose 12%, and online sales jumped 49%, to $15.8 million from $10.6 million. The company’s earnings jumped 83.3%, to $38.6 million, or $0.57 a share, from $21.1 million, or $0.31 a share. Revenue rose 20.1%, to $453 million from $377.1 million a year earlier. Aeropostale’s wide variety of clothing, low prices and aggressive promotions were the main reasons behind the company’s strong results....
ALIMENTATION COUCHE-TARD $16.79 (Toronto symbol ATD.B: SI Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 193.1 million; Market cap: $3.2 billion) is up over 25% since reporting sharply higher earnings in the latest quarter. In the three months ended April 26, 2009, Couche-Tard’s earnings rose 145.2%, to $38 million, or $0.20 a share, from $15.5 million, or $0.08 a share, a year earlier. (All figures except share price in U.S. dollars.) The higher earnings were mainly the result of acquisitions, higher profit margins on gasoline, a rise in same-store merchandise revenue, lower operating expenses and growing same-store gasoline volume in Canada....
ALIMENTATION COUCHE-TARD, $16.50, symbol ATD.B on Toronto, rose over 20% this week after it reported sharply higher earnings in the latest quarter. In the three months ended April 26, 2009, Couche-Tard’s earnings rose 145.2%, to $38 million, or $0.20 a share, from $15.5 million, or $0.08 a share, a year earlier. (All figures except share price in U.S. dollars.) The higher earnings were mainly the result of acquisitions, higher profit margins on gasoline, a rise in same-store merchandise revenue, lower operating expenses and growing same-store gasoline volume in Canada....
ALIMENTATION COUCHE-TARD $13.27 (Toronto symbol ATD.B: SI Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 193.1 million; Market cap: $2.6 billion) has agreed to buy 450 On the Run convenience stores in the U.S. from Exxon-Mobil. It will also convert 43 locations in Phoenix, Arizona, to its Circle K brand. Couche-Tard minimizes the risk of its growth-by-acquisition strategy by looking for profitable, well-managed chains that have room to grow. The company does a good job of integrating new acquisitions, and it could buy more of the 2,100 On the Run stores that ExxonMobil still owns. Alimentation Couche-Tard is still a buy.
Becker Milk, $8.40, symbol BEK.B on Toronto (Shares outstanding: 1.8 million; Market cap: $15.1 million), owns and manages 71 retail commercial properties with a total of 88 individual retail stores (most are single store sites, but some are multi-store plazas). One property is in metro Toronto, and the rest are in other parts of southern Ontario. On January 31, 2009, the company had leased all 88 of its individual retail stores, as well as four residential sites to third parties. The residential sites are made up of apartments above the retail commercial sites. Becker has leased 62 stores to Mac’s Convenience Stores Inc. (a subsidiary of Alimentation Couche-Tard Inc., symbol ATD.B on Toronto), and the remaining 26 are leased to other tenants. In addition, the company is bearing the cost of five parcels of unoccupied land (one of which is being held for sale) and one vacant building. Becker Milk pays a regular dividend of $0.30 a share twice yearly, for a current yield of 7.1%. It also recently paid a special dividend of $2 a share....
METRO INC. $37 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 111.4 million; Market cap: $4.1 billion; Price-to-sales ratio: 0.4; SI Rating: Average) operates roughly 660 grocery stores in Quebec and Ontario. Metro, Super C and Food Basics are some of its major banners. Metro also operates or supplies 270 drugstores, and owns about 23% of Quebec-based convenience-store operator Alimentation Couche-Tard Inc. (Toronto symbol ATD.B) To reduce its reliance on Quebec, which accounted for nearly all of its revenue, Metro bought A&P Canada for $1.7 billion in 2005. The chain consisted of 240 food stores in Ontario, mostly under the A&P and Dominion names.