Alimentation Couche-Tard

WYNDHAM WORLDWIDE, $12.12, symbol WYN on New York, rose 35% this week after it reported higher first-quarter profits. In the three months ended March 31, 2009, Wyndham’s earnings, excluding one-time items, rose 19.4%, to $74 million, or $0.41 a share, from $62 million, or $0.35 a share, a year earlier. Analysts had been expecting $0.35 a share. Revenue fell 11%, to $901 million from $1.01 billion, as Wyndham’s hotels saw fewer guests. Moreover, the company gets about a third of its revenue from its overseas operations, and the higher U.S. dollar hurt their contribution. Despite the lower revenue, Wyndham’s profits were higher than in the year-earlier period. This was mainly because the company took steps to lower its costs, including its marketing and administrative expenses. Wyndham is one of the world’s largest hospitality companies, with 7,000 franchised hotels worldwide. It operates under a number of quality brands, including Wyndham Hotels and Resorts, Ramada, Days Inn, Super 8, Wingate by Wyndham, Baymont Inn & Suites, Microtel Inns & Suites, Hawthorn Suites, Howard Johnson, Travelodge, Knights Inn and AmeriHost Inn....

ALIMENTATION COUCHE-TARD $12.65 (Toronto symbol ATD.B: SI Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 193.1 million; Market cap: $2.4 billion) is the largest convenience-store operator in Canada, with over 2,000 outlets. It also has more than 3,000 U.S. stores in 28 states. Grocery retailer Metro Inc. owns 10.3% of Couche-Tard. The Canadian stores operate under the Couche- Tard and Mac’s banners, while the U.S. stores mainly use the Circle K banner. Couche-Tard sells fuel at 65% of its 4,000 company-owned stores. It also has about 4,175 Circle K licensed stores, primarily in Asia. In the three months ended February 1, 2009, earnings rose 40.8%, to $71.1 million from $50.5 million a year earlier. (All figures except share price in U.S. dollars.) Earnings per share rose 48%, to $0.37 from $0.25 on 4.4% fewer shares outstanding. Higher-than-expected same-store sales (excluding fuel) were behind the gains. Lower gas prices drove down revenue by 14.8%, to $3.9 billion from $4.6 billion....

ALIMENTATION COUCHE-TARD, $12.15, symbol ATD.B on Toronto, reported strong earnings in the latest quarter due to stronger-than-expected same-store sales (excluding fuel). In Canada, they rose 4.7% and in the United States 0.5%. This helped offset a 6.2% drop in the volume of U.S. gas sold. Couche-Tard’s American customers, in particular, are cutting back on their driving because of the recession. Couche-Tard has more than 3,000 convenience stores in the U.S., and is the largest convenience-store operator in Canada, with over 2,000 outlets. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K banner. Couche-Tard sells fuel at 65% of its 4,000 company-operated stores. In the three months ended February 1, 2009, Couche-Tard’s earnings rose 40.8%, to $71.1 million from $50.5 million a year earlier. (All figures except share price in U.S. dollars.) Earnings per share rose 48%, to $0.37 from $0.25 on 4.4% fewer shares outstanding. Lower gas prices in the U.S. and Canada drove down revenue by 14.8%, to $3.9 billion from $4.6 billion....

ALIMENTATION COUCHE-TARD, $13.20, symbol ATD.B on Toronto, is the largest convenience store operator in Canada, with over 2,000 outlets. The company has agreed to buy 13 convenience stores/gas stations in central Quebec from privately held Group Therrien for an undisclosed price. All 13 stores sell gas under either the Petro-T or Esso brands. Four of the stores have fast-food outlets (two A&W and two Subway), and three have car washes. Couche-Tard will lease the land and buildings at market value for 40 years and buy the stores’ equipment and inventory. The stores will continue to sell Esso and Petro-T gas, but will operate under the Alimentation Couche-Tard banner. Aside from its extensive network of stores in Canada, Alimentation Couche-Tard has more than 3,000 U.S. stores in 28 states. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K banner. The company sells fuel at 66% of its stores....

ALIMENTATION COUCHE-TARD $15.50 (Toronto symbol ATD.B: SI Rating: Extra risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 193.1 million; Market cap: $3.0 billion) is the largest convenience store operator in Canada, with over 2,000 stores. It also has more than 3,000 U.S. stores in 28 states. Metro Inc. owns 10.3% of the company. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K banner. It sells fuel at 65% of its 4,000 company-operated stores. Couche-Tard also has about 3,500 Circle K licensed stores located in Japan, Hong Kong, China, Indonesia, Guam, Macao and Mexico. In the three months ended July 20, 2008, revenues rose 20.9%, to $4.3 billion from $3.6 billion a year earlier. (All figures except share price and market cap in U.S. dollars.) Excluding one-time items, earnings per share fell 29.4%, to $0.24 from $0.34. That was largely due to a one-time tax expense, plus higher operating costs. Cash flow per share fell 8.8%, to $0.52 from $0.57....

One of the brightest signs in today’s market is that many great stocks now trade below 10 times earnings. That’s especially true of high-quality technology issues, since they spend so heavily on research, which gets written off against earnings like a routine expense. Low p/e ratios are also particularly appealing at times when interest rates are low, as they are now. Of course, earnings could drop next year and push up those p/e ratios. Stock prices could move lower, for a variety of reasons. But that’s always a risk. To profit best, you need to invest mainly in well-established companies that are likely to recover from the economic downturn and go on to produce still higher earnings in the future. KINGSWAY FINANCIAL SERVICES, $5.98, symbol KFS on Toronto, met on November 21 with representatives of New York-based money management company and shareholder activists, The Stilwell Group....

TRIMARK CANADIAN FUND $18.44 (CWA Rating: Aggressive) (AIM Funds Management Inc., 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631- 7008; Website: www.aimfunds.ca. Buy or sell through brokers.) uses a bottom-up stock-picking style (using fundamentals such as earnings, cash flow and low debt) that looks at valuation measures and then tries to pick stocks selling at a discount to long-term value. The fund’s 10 largest holdings are Thomson Reuters Corp., TD Bank, Bank of Nova Scotia, MacDonald Dettwiler, Time Warner, Willis Group Holdings, Alimentation Couche-Tard, Power Corporation, Toromont Industries and Molex Inc. The fund’s portfolio breaks down by sector as follows: Financials, 26.3%; Consumer discretionary, 20.1%; Information technology, 10.8%; Materials, 9.8%; Energy, 4.2%; and Industrials, 7.8%....

TRIMARK CANADIAN FUND $19.97 (CWA Rating: Aggressive) (AIM Funds Management Inc., 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631 -7008; Website: www.aimfunds.ca. Buy or sell through brokers.) uses a bottom-up stock-picking style (using fundamentals such as earnings, cash flow and low debt) that looks at valuation measures and then tries to pick stocks selling at a discount to long-term value. The fund’s 10 largest holdings are TD Bank, Bank of Nova Scotia, Manulife Financial, Power Corporation, Plum Creek Timber, Alimentation Couche-Tard, Thomson Corp., Yamana Gold, Toromont Industries and Molex Inc. The fund’s portfolio breaks down by sector as follows: Financials, 30.5%; Consumer discretionary, 19.1%; Information technology, 11.2%; Industrials, 9.5%; Materials, 8.2%; Consumer staples, 7.0%; Health care, 6.4%; Energy, 4.2%; and Telecommunication services, 2.6%....

METRO INC. $34.04 (Toronto symbol MRU.A; SI Rating: Extra Risk) (514-643-1055; www.metro.ca; Shares outstanding: 115.3 million; Market cap: $3.9 billion) is a leader in the food distribution business in Quebec, operating Metro supermarkets, Super C discount supermarkets and Marche Richelieu neighbourhood stores. It also operates Loeb stores in northeastern Ontario. Metro expanded further into Ontario in 2005 with the acquisition of A&P Canada for $1.7 billion. A&P Canada operates 244 food stores throughout Ontario under the A&P, Dominion, Food Basics, The Barn and Ultra Food & Drug banners. Metro’s ongoing earnings in its fiscal third quarter ended July 7, 2007 rose 16.3%, to $91.1 million or $0.78 a share, from $78.3 million or $0.68 a share. This excludes one-time charges from acquisitions and other sources. Sales rose slightly, to $3.341 billion from $3.337 billion, but rose 3.2% excluding wholesale interests divested one year earlier. Metro’s shares yield 1.4%....

TRIMARK CANADIAN FUND $25.14 (CWA Rating: Aggressive) (AIM Funds Management Inc., 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631-7008; Website: www.aimfunds.ca. Buy or sell through brokers.) uses a bottom-up stock-picking style (using fundamentals such as earnings, cash flow and low debt) that looks at valuation measures and then tries to pick stocks selling at a discount to long-term value. The fund’s 10 largest holdings are TD Bank, Bank of Nova Scotia, Manulife Financial, Power Corporation, Royal Bank, Alimentation Couche- Tard, Time Warner, Loblaw, Toromont Industries and Molex Inc. The fund’s portfolio breaks down by sector as follows: Financials, 26.6%; Consumer discretionary, 17.1%; Information technology, 14.6%; Industrials, 9.1%; Consumer staples, 8.3%; Materials, 6.7%; Energy, 5.7%; Health care, 5.7%; and Telecom, 3.2%....