alimentation couche-tard

RUSSEL METALS $33.17 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 61.0 million; Market cap: $2.0 billion; Dividend yield: 4.2%) reports that its revenue rose 12.4% in the quarter ended March 31, 2014, to $924.0 million from $821.8 million a year earlier. Earnings gained 33.6%, to $29.0 million, or $0.47 a share. A year earlier, the company earned $21.7 million, or $0.36. Russel holds cash of $86.3 million, or $1.41 a share. Its long-term debt of $458.3 million is a reasonable 22.0% of its market cap. The stock yields 4.2%. The company gets about 35% of its revenue from customers in the oil and gas drilling industry. That, plus its exposure to fluctuating steel prices, adds risk. However, Russel’s long-term outlook remains positive, and it is well-positioned to gain as the economy recovers....

METRO INC. $68 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 87.6 million; Market cap: $6.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.8%; TSINetwork Rating: Average; www.metro.ca) operates about 600 supermarkets in Quebec and Ontario. It also has over 250 drugstores that operate under the Brunet, The Pharmacy and Drug Basics banners. Metro continues to cut costs in response to competition from larger Canadian chains, like Loblaw and Sobeys, and big box stores like Wal-Mart and Costco. It is also converting some of its underperforming Metro outlets in Ontario to the faster-growing Food Basics discount banner. In its fiscal 2014 second quarter, which ended March 15, 2014, Metro’s earnings rose 0.5%, to $96.9 million from $96.4 million a year earlier. In the last six months, the company has spent $301.8 million on share buybacks. Due to fewer shares outstanding, per-share earnings rose 9.2%, to $1.07 from $0.98....

ALIMENTATION COUCHE-TARD $29.82 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 538.2 million; Market cap: $17.1 billion; Dividend yield: 0.4%) has split its shares on a 3-for-1 basis.

When a company’s stock price goes up, it has an incentive to split the stock to make it seem cheaper to investors, who may then buy more. This can make the stock more liquid than if it refrained from splits and let its share price go to uncommonly high levels.

Alimentation Couche-Tard is a buy.

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YAMANA GOLD INC., $8.38, symbol YRI on Toronto, has succeeded in its joint $3.9-billion bid with Agnico Eagle Mines (symbol AEM on Toronto) for Osisko Mining (symbol OSK). Goldcorp (symbol G) has withdrawn its offer. Agnico Eagle and Yamana will now each own half of Osisko’s assets, including the Canadian Malartic gold mine in Quebec. The acquisition lets Yamana diversify beyond South America and Mexico, where it has seven mines. It should also boost the company’s per-share cash flow. Yamana Gold is still a buy....

PLEASE NOTE: Our next Hotline will go out on Friday, April 25, 2014. POTASH CORP. OF SASKATCHEWAN, $38.45, Toronto symbol POT, rose 5% this week on speculation that BHP Billiton (New York symbol BHP) may launch a second takeover offer for the company. (BHP is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks.) In 2010, BHP offered to buy Potash Corp. for $43.33 U.S. a share (adjusted for a 3-for-1 stock split in February 2011). However, Ottawa ultimately blocked the takeover, as it did not provide a “net benefit” to Canada under the Investment Canada Act....

ALIMENTATION COUCHE-TARD $91.36 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $17.3 billion; Dividend yield: 0.4%) grew from just 630 stores in Quebec in 1998 to 1,612 in 1999, mostly through the purchase of Silcorp Ltd....

ALIMENTATION COUCHE-TARD $91.36 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $17.3 billion; Dividend yield: 0.4%) grew from just 630 stores in Quebec in 1998 to 1,612 in 1999, mostly through the purchase of Silcorp Ltd. and its 980 Mac’s and Becker’s stores in Ontario and western Canada. Couche-Tard then continued to expand through profitable acquisitions, including buying 2,290 stores in the U.S. in 2003 from ConocoPhillips.

The company made another big acquisition in June 2012 with the $2.7-billion purchase of Norway’s Statoil Fuel & Retail chain of gas stations (all figures except share price in U.S. dollars).

In Europe, Couche-Tard now operates 2,263 outlets across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic states (Estonia, Latvia and Lithuania) and Russia. That’s in addition to its 6,221 stores throughout North America operating under the Couche- Tard and Circle K banners.
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ALIMENTATION COUCHE-TARD $81.60 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $15.4 billion; Dividend yield: 0.5%) was our #1 pick for 2012 at $30.55. Its shares are now up a whopping 167.1%.

The company continues to introduce more-profitable products at its North American stores, including improved fresh and takeout food....

PLEASE NOTE: One week from today, on January 17, 2014, shortly after the stock market closes at 4:00 p.m. Toronto time, we will reveal our #1 Canadian Stock of 2014 to subscribers of The Successful Investor. You can be among the first to hear about our #1 pick for 2014. Because you’re a loyal subscriber, we are happy to offer you a bargain-priced, no-risk introduction to The Successful Investor. It gives you the first month—and the 2014 Stock of the Year—FREE. But you must act now. Click here. BELLATRIX EXPLORATION LTD., $8.37, symbol BXE on Toronto, has ended 2013 with record production of 38,000 barrels of oil equivalent a day (including natural gas). That’s a big improvement over its earlier forecast of 30,000 to 31,000. Several new wells about to enter production will boost that figure to 40,000 barrels a day. The company plans to spend $370 million on exploration and development this year. It aims to drill a total of 146 wells: 115 oil and 31 gas. It could end 2014 with production of over 47,000 barrels a day....

ALIMENTATION COUCHE-TARD $81.60 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $15.4 billion; Dividend yield: 0.5%) was our #1 pick for 2012 at $30.55. Its shares are now up a whopping 167.1%.

The company continues to introduce more-profitable products at its North American stores, including improved fresh and takeout food. There is lots of potential to sell similar items through the Statoil chain in Norway, which it bought in June 2012.

Alimentation Couche-Tard is still a buy.
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