atd b

ALIMENTATION COUCHE-TARD, $25.54, symbol ATD.B on Toronto, is the largest convenience store operator in Canada, with over 2,000 outlets. It also has over 3,500 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. The fuel pumps at most stores provide 68% of the company’s sales. In the three months ended January 30, 2011, Couche-Tard’s earnings rose 29.6%, to $71.0 million, or $0.38 a share, from $54.8 million, or $0.29 a share, a year earlier (all figures except share prices in U.S. dollars). The latest earnings beat the consensus estimate of $0.37 a share. Revenue rose 13.7%, to $5.6 billion from $4.9 billion. Same-store merchandise sales climbed 3.9% in the U.S., and 0.4% in Canada. U.S. sales make up 77.9% of total sales....

ALIMENTATION COUCHE-TARD $30.76 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 242.4 million; Market cap: $7.5 billion; Dividend yield: 1.0%) is the largest convenience-store operator in Canada, with over 2,000 outlets. It also has over 3,900 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. Couche-Tard sells fuel at over 68% of its stores.

In the quarter ended October 9, 2011, Couche-Tard’s earnings per share rose 6.9%, to $0.62 from $0.58 a year earlier (all figures except share price and market cap in U.S. dollars).

Sales rose 24.1%, to $5.2 billion from $4.1 billion. The gains came from higher fuel prices, the stronger Canadian dollar and higher merchandise sales. The company gets 30% of its sales by selling merchandise.

...

MART RESOURCES $0.70 (Toronto symbol MMT; SI Rating: Speculative) (403-270-1841; www.martresources.com; Shares outstanding: 335.5 million; Market cap: $115.8 million; No dividends paid) is focused on developing, producing and drilling for oil at its onshore properties in Africa. Mart is currently producing oil from its 50%-held Umusadege field in Nigeria. Mart recently released preliminary results from its latest well at the field, the UMU-6 well. One section of the well flowed oil at 3,433 barrels per day. Average daily production for the entire Umusadege field was 3,886 barrels per day in latest quarter. Operating in Nigeria exposes the company to considerable political risk. However, further drilling success would continue to steadily increase Mart’s oil production....

DUNDEEWEALTH INC., $20.51, symbol DW on Toronto, has received a friendly takeover offer from Bank of Nova Scotia (Toronto symbol BNS), for the 82% of the company that the bank doesn’t already own. In September 2007, Bank of Nova Scotia paid $348 million for an 18% interest in DundeeWealth. The bank also gained a right of first refusal on any sale of the controlling interest in DundeeWealth. Bank of Nova Scotia is now offering 0.2497 of a Bank of Nova Scotia common share for each DundeeWealth common share. Plus, each DundeeWealth shareholder can choose to receive either $5.00 in cash or 0.2 of a $25.00, 3.70% five-year rate reset Bank of Nova Scotia preferred share for each DundeeWealth common share....

ALIMENTATION COUCHE-TARD $23.22 (Toronto symbol ATD.B: SI Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 183.6 million; Market cap: $4.3 billion; Dividend yield: 0.7%) has dropped its $2-billion U.S. hostile takeover bid for Casey’s General Stores (symbol CASY on Nasdaq). Couche-Tard allowed its tender offer for all of Casey’s shares to expire at 5:00 p.m. on September 30. Couche-Tard, which was offering $38.50 U.S. a share, decided not to compete with convenience-store operator 7-Eleven’s offer of $40 a share, or $2.1 billion. Casey’s now trades at $42.24, which suggests that investors expect a still higher offer, even though Couche-Tard has dropped out of the bidding. Even without the takeover, we still like Couche-Tard’s growth prospects. Meanwhile, the company has enhanced its reputation as a disciplined bidder that does not overpay for acquisitions....

ALIMENTATION COUCHE-TARD INC., $22.47, symbol ATD.B on Toronto, has dropped its $2-billion U.S. hostile takeover bid for Casey’s General Stores (symbol CASY on Nasdaq). Couche-Tard allowed its tender offer for all of Casey’s outstanding shares to expire at 5:00 p.m. on September 30. Couche-Tard, which was offering $38.50 U.S. a share, decided not to compete with convenience-store chain 7-Eleven’s offer of $40 a share, or $2.1 billion. Casey’s now trades at $41.37, which suggests that investors expect a still higher offer, even though Couche-Tard has dropped out of the bidding. Even without the takeover, we still like Couche-Tard’s growth prospects. Meanwhile, the company has enhanced its reputation as a disciplined bidder that does not overpay for acquisitions....

MAJOR DRILLING, $27.04, symbol MDI on Toronto, jumped 10% this week after the company reported sharply higher results in the latest quarter. Major’s revenue jumped 75.2% in the three months ended July 31, 2010, to $109.5 million from $62.5 million a year earlier. The company earned $5.1 million, or $0.21 a share. A year earlier, it lost $3.3 million, or $0.14 a share. Cash flow was $12.1 million, or $0.51 a share, in the latest quarter, up 58.9% from $7.6 million, or $0.32 a share. Major expects to see a continued rebound during the rest of 2010. Gold prices are near all-time highs, base-metal prices are strengthening, and many mining companies have raised new funds for exploration....

METRO INC. $45 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 105.8 million; Market cap: $4.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.5%; SI Rating: Average) operates roughly 660 grocery stores in Quebec and Ontario. Its major banners include Metro, Metro Plus, Super C and Food Basics. As well, Metro operates 267 drug stores, including 81 inside its supermarkets. The company also owns roughly 23% of Alimentation Couche-Tard Inc. (Toronto symbol ATD.B), which operates over 6,000 convenience stores in Canada and the U.S. Couche-Tard is a recommendation of Stock Pickers Digest, our publication for aggressive investors. This investment accounts for about 5% of Metro’s annual earnings.

Big purchase still paying off

...

CANALASKA URANIUM, $0.09, symbol CVV on Toronto, plans to consolidate its shares on a 1-for-10 basis. That will lower its shares outstanding from about 171.9 million to 17.2 million. Companies typically cut back their shares to make them more attractive to institutional or other large investors who typically avoid stocks that trade for just pennies a share. Consolidations, or reverse stock splits, sometimes hurt investor confidence. They can undermine the value of a given holding by as much as 25%, at least temporarily, even though there is no change in the company’s business or assets. Other times, however, they have little, if any, effect....

AMERICAN WOODMARK $15.67, symbol AMWD on Nasdaq, is a major U.S. maker of cabinets for kitchens and bathrooms. It sells its cabinets under the American Woodmark, Timberlake and Shenandoah brands. In the three months ended July 31, 2010, American Woodmark lost $3.4 million, or $0.24 a share. Still, that’s a lot better than the $6.4 million, or $0.45 a share, it lost a year earlier. If you exclude one-time restructuring charges, the company would have lost $0.34 a share a year ago. Sales rose 8.4%, to $109.3 million from $100.8 million. The company’s recent cost cuts, including lower labour costs, were the main reason for the improved results. In the last year, American Woodmark has laid off a number of salaried employees, closed two less-efficient plants and suspended production at a third....