atd b

ALIMENTATION COUCHE-TARD $63.38 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 179.4 million; Market cap: $11.6 billion; Dividend yield: 0.5%) reports 44.9% higher sales in the three months ended April 28, 2013, up to $8.8 billion from $6.1 billion a year earlier. The gain mostly came from Norway’s Statoil Fuel & Retail ASA, which it bought for $2.7 billion in June 2012 (all figures except share price in U.S. dollars).

Excluding one-time items, earnings per share rose 7.0%, to $0.61 from $0.57. The latest earnings missed the consensus estimate of $0.77 a share, but that was because the latest quarter included upfront costs related to Statoil’s new computer systems and reporting software.

The company’s outlook is positive. But while high gasoline prices are pushing up the company’s sales, they’re also causing motorists to cut back on driving. That’s hurting its fuel sales volumes, which is cutting its profit margins on the fuel it does sell. As well, fewer customers at the pumps means less traffic through the company’s stores.

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ALARMFORCE INDUSTRIES, $10.41, symbol AF on Toronto, reports that its sales rose 9.1% in the three months ended April 30, 2013, to $11.9 million from $10.9 million a year earlier. The company earned $1.3 million, or $0.11 a share, compared to a loss of $238,021, or $0.02 a share. AlarmForce’s revenue rose along with its subscriber base: the company ended the quarter with 31,200 U.S. customers, up 22.8% from 25,400 a year ago. In Canada, it now has 106,500 subscribers, up 1.8%. The company’s earnings rose because it spent a lot less on marketing than in the year-earlier quarter, when it increased its advertising spending as it launched its VideoRelay system. This service lets subscribers watch their homes through computers and smartphones....

METRO INC. $70 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 95.2 million; Market cap: $6.7 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.4%; TSINetwork Rating: Average; www.metro.ca) earned $100.5 million in the 12 weeks ended March 16, 2013. This figure excludes a $266.4-million gain on the sale of about half its stake in Alimentation Couche-Tard Inc. (Toronto symbol ATD.B), which operates convenience stores in North America and Norway. The latest earnings are also up 4.4% from $96.3 million a year earlier. Metro used the sale proceeds to buy back shares. As a result, earnings per share rose 8.5%, to $1.02 from $0.94.

Sales fell 2.6%, to $2.5 billion from $2.6 billion, as the company closed some unprofitable supermarkets in Ontario. As well, the year-earlier quarter, which began on December 18, 2011, included the busy week before Christmas. Same-store sales were flat.

Metro is a buy....

METRO INC. $70 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 95.2 million; Market cap: $6.7 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.4%; TSINetwork Rating: Average; www.metro.ca) earned $100.5 million in the 12 weeks ended March 16, 2013....

AEROPOSTALE INC. $12.76 (New York symbol ARO; TSINetwork Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding: 78.3 million; Market cap: $999.1 million; No dividends paid) is a mall-based retailer of casual clothing and accessories. It now has 984 stores in the U.S., Canada and Puerto Rico that mainly target 14- to 17-year-old women and men....

When investors base buy and sell decisions on short-term market forecasts, they often experience notably poor investment results, or even lose money. This may come as a shock to them. In hindsight, it may seem that past market trends, up or down, should have been easy to foresee. But in fact, nobody consistently foresees these trends. That’s why most investors hurt their returns if they let short-term market forecasts have much of an impact on their investment decisions. This year, investors may feel tempted to follow the long-time saying that you should, “Sell in May and go away.” This saying is based on the observation that, over the years, stock prices have often gone sideways or dropped between May and October. This year, the sell-in-May rule may seem particularly timely. The market was stronger this year than many observers expected, so they may see it as over-due for a setback. The problem with this kind of analysis is that it fails to distinguish between causation and correlation. The pattern of falling stock prices between May and October may simply be a coincidence, like the pattern that may appear in a series of coin tosses or spins of a roulette wheel....

ALIMENTATION COUCHE-TARD $58.75 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 179.4 million; Market cap: $10.5 billion; Dividend yield: 0.6%) 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 February 3, 2013, Couche-Tard’s sales jumped 75.2%, to $11.6 billion from $6.6 billion a year earlier. The gain mostly came from Norway’s Statoil Fuel & Retail ASA, which Couche-Tard bought for $2.7 billion in June 2012 (all figures except share price in U.S. dollars). Excluding one-time items, earnings rose 72.3%, to $153.2 million, or $0.81 a share, from $88.9 million, or $0.49 a share.

Couche-Tard’s outlook is positive. It continues to introduce more-profitable products at its North American stores, including new drinks and improved fresh and takeout food. There is lots of potential for it to sell similar items at the Statoil gas station chain.
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ALIMENTATION COUCHE-TARD, $53.63, 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. In the three months ended February 3, 2013, Couche-Tard’s sales jumped 75.2%, to $11.6 billion from $6.6 billion a year earlier. The gain mostly came from Norway’s Statoil Fuel & Retail ASA, which Couche-Tard bought for $2.7 billion in June 2012 (all figures except share price in U.S. dollars). The company also benefited from higher fuel prices and merchandise sales. Couche-Tard gets about 30% of its revenue by selling merchandise....

METRO INC. $64 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 96.2 million; Market cap: $6.2 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 (see page 21) 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.

Couche-Tard sale brings a windfall

The company recently sold roughly half of its stake in Alimentation Couche-Tard Inc. (Toronto symbol ATD.B), which operates convenience stores in North America and Norway. (Couche-Tard is a recommendation of Stock Pickers Digest, our newsletter that focuses on aggressive investing.) That left Metro with a 5.7% economic interest and a 17.0% voting interest in Couche-Tard.

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METRO INC. (Toronto symbol MRU; www.metro.ca) has moved up sharply in the past few months. That’s mainly because it is taking steps to unlock some of its hidden value, including selling some of its investments....